London bosses warned Chancellor John Healey not to hammer businesses with more tax rises as he seeks to boost Britain’s economic growth.
The London Chamber of Commerce and Industry (LCCI) urged the Government to “lower the cost of doing business” and make the capital “more internationally competitive for investment, talent and job creation”.
The LCCI issued the warning just days after the Chancellor ripped up the Treasury “rule book” to channel funding away from London to the regions.
In a keynote speech on Monday, ahead of the Budget on October 28, Mr Healey set out plans to grow the economy through an “active” state.
He announced a £150 million fund for fast-growing northern firms.
Taking questions afterwards, he brushed off demands for more clarity on his tax plans.
“If I respond to speculation now, that will only fuel more speculation,” he said.
“And every Chancellor would say that's for the Budget, and I'll set out my plans and the future route for Government for this country at that Budget.”
Earlier, LCCI chief executive Karim Fatehi told The Standard: "The Chancellor must have two clear objectives in mind at this Budget: meaningfully lowering the cost of doing business, and making the capital more internationally competitive to drive UK-wide growth.
“With business costs at exceptionally high levels, our members are clear they cannot absorb any further costs.”
New Prime Minister Andy Burnham has not ruled out tax rises to pay for a £5 billion boost in defence, rebalancing of the economy, help for people with the cost of living, and to tackle Britain’s social care crisis.
He is being urged by union chiefs to hit banks with a windfall levy of up to £60 billion.
The Treasury is reported to be modelling increases in capital gains tax and higher levies on banks and profits of energy companies.
But the LCCI called on the Government to reverse the £20 billion hike in National Insurance contributions for employers in Rachel Reeves’ first Budget which is widely blamed for hitting thousands of businesses and undermining economic growth.
Mr Fatehi added: “The Budget needs to recognise that the most successful economies across the world build a consensus around their capital succeeding.
“We cannot achieve growth in every UK postcode without actively deciding to make London more internationally competitive for investment, talent and job creation.”
Former Goldman Sachs chief economist Lord O’Neill of Gatley, one of Mr Burnham’s key economic advisers, has also urged the PM to focus on London, the West Midlands and the Northern Powerhouse of Manchester, Liverpool and Leeds to increase growth.
In an exclusive interview with The Standard last week, Mr Burnham rejected claims that he is anti-London, stressing he wanted to unleash the capital to grow “faster and further”.
He highlighted billions of pounds allocated to build more council and social housing in the city.
However, thousands, if not tens of thousands, of jobs are set to be axed in Whitehall as part of his plans for the “biggest devolution of power in modern times”.
In his speech, Mr Healey sought to tell an “optimistic story” about Britain, echoing Mr Burnham’s more upbeat note than during Sir Keir Starmer’s premiership.
But it comes as the Government is caught in an economic crisis due to the high cost of Government borrowing.
Mr Healey outlined his aim to spread growth more widely across the UK by using public investment to attract private capital.
The British Business Bank will commit up to £150 million to a new fund for the North “to get behind the most innovative and fast-growing firms”, the Chancellor is expected to say.
“This is not sentimentality, it’s supply side economics,” he stressed.
But new shadow chancellor Andrew Griffith said Mr Healey’s speech would “do little to comfort hard-working families and businesses worried about more tax rises”.
Economists have warned that Mr Healey will almost certainly have to raise taxes or cut spending to stick to the Government’s fiscal rules.
