Budget tax hikes would be ‘road to ruin,’ Healey warned
A top City trade body has warned Chancellor John Healey that tax hikes at the October Budget would set the UK on the “road to ruin”.
The British Chambers of Commerce (BCC) has urged the Chancellor not to “pile more taxes on firms,” saying that the Treasury should instead cut the costs facing firms to secure economic growth.
Shevaun Haviland, the BCC’s director general, said: “The Chancellor must use his first budget to cut the cost of doing business, allowing everyone to reap the economic benefits.
“Piling more taxes on firms, would be a road to ruin, and the quickest way to destroy business confidence.”
The industry body has set out a list of demands for the Chancellor, which include helping young people back into work, cutting business energy bills and setting a roadmap to reduce taxes.
Ditch triple lock to lower employment costs, Healey urged
The BCC has said that slashing employment costs is one of the biggest actions Healey could take to soften the headwinds facing British firms.
The government should fund cuts to employer National Insurance Contributions (NICs) for all under-25-year-olds by replacing the triple lock on the state pension, the trade body said.
In recent months, leading economists and former government ministers have ramped up pressure on the government to scrap the triple lock, which they say is becoming an unsustainable drain on the public finances.
Lord Jim O’Neill, a former economic adviser to Andy Burnham who turned down a formal role in his government, has urged the Prime Minister to curb the “excesses of the triple lock”.
Former Conservative Chancellor Jeremy Hunt told Morning Wire in June that the triple lock has become an “anchor-drag” on growth and must be ditched.
‘Back business and cut costs’
The BCC has also called on the government to set out a “targeted tax reduction package” to ease the pressures on firms caused by energy costs and business rates.
The Treasury should fund 75 per cent of the Renewables Obligation, which requires firms either to source a set amount of their energy from green sources or pay a penalty, the BCC said.
The trade body is urging the government to lower all business rates multipliers. Last week, the boss of John Lewis warned Andy Burnham to swerve a “terrible” hike to business rates multipliers for the biggest high street businesses.
The BCC’s Haviland said: “We know the government is in a fiscal bind and its choices are limited. But support for business is not just money out the door, it generates vital economic returns. Easing cost pressures will give firms breathing space to create jobs, investment and growth.
“Pro-growth choices have never been more urgent. The Chancellor must back business, cut costs and deliver growth.”