The British Chambers of Commerce has issued a stark warning to Chancellor John Healey ahead of the October Budget, urging him to avoid raising taxes on businesses.
The trade body says that piling additional tax burdens on firms would destroy business confidence at a critical moment for the UK economy.
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.”
Haviland added: “Piling more taxes on firms, would be a road to ruin, and the quickest way to destroy business confidence.”
The BCC has set out a package of demands for Healey, including helping young people back into work, cutting business energy bills, and establishing a roadmap to reduce taxes.
One of the trade body’s most prominent proposals is slashing employer National Insurance Contributions for all workers aged under 25, which it describes as one of the most impactful steps Healey could take.
The BCC suggests funding those NIC cuts by replacing the triple lock on the state pension, a policy that has come under sustained pressure from economists and former ministers in recent months.
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 has also described the triple lock as an “anchor-drag” on growth that must be ditched, telling City AM those views directly in June.
The BCC is additionally calling on the government to introduce a targeted tax reduction package to ease pressures caused by energy costs and business rates across the country.
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 also urging the government to lower all business rates multipliers, a demand that aligns with warnings from the boss of John Lewis last week over a potentially “terrible” hike for major high street businesses.
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.”
She concluded: “Pro-growth choices have never been more urgent. The Chancellor must back business, cut costs and deliver growth.”