London business leaders have warned Chancellor John Healey against imposing new taxes in the upcoming Budget.
The London Chamber of Commerce and Industry (LCCI) urged the Government to reduce business costs. It also called for stronger measures to attract investment, talent and jobs to the capital.
The warning comes days after Healey announced plans to redirect more government funding from London to other UK regions.
Healey will outline his economic plans in a keynote speech on Monday.
The Chancellor plans to promote growth through what he calls an “active” state. He will also announce a £150 million fund for fast-growing northern companies.
The Government wants to support regional growth while strengthening the wider UK economy. However, London business leaders fear additional taxes could increase pressure on companies.
LCCI chief executive Karim Fatehi urged Healey to focus on reducing the cost of doing business. He said businesses already face exceptionally high costs. He warned that companies cannot absorb further increases.
Prime Minister Andy Burnham has refused to rule out further tax rises.
The Government could use additional revenue to fund several major priorities. These include a £5 billion increase in defence spending and measures to address the cost-of-living crisis.
The Government also wants to tackle Britain’s social care challenges and rebalance economic growth across the country. Union leaders have called for a major windfall levy on banks. Some proposals could raise as much as £60 billion.
Meanwhile, the Treasury has reportedly examined increases to capital gains tax. Officials have also considered higher levies on banks and energy company profits.
The LCCI has also urged the Government to reverse the £20 billion increase in employer National Insurance contributions.
Rachel Reeves introduced the increase in her first Budget. Many businesses have blamed the measure for raising costs and weakening economic growth.
Fatehi said London needs stronger support to remain competitive internationally.
He argued that successful economies build broad support around their major economic centres.
“We cannot achieve growth in every UK postcode without actively deciding to make London more internationally competitive,” Fatehi said.
Former Goldman Sachs chief economist Lord O’Neill of Gatley has also advised Burnham on economic policy.
He has urged the Prime Minister to focus on several major economic areas.
These include London, the West Midlands and the Northern Powerhouse. The region includes Manchester, Liverpool and Leeds.
The Government now faces pressure to balance regional investment with London’s role in driving national growth.
Business leaders will watch the October 28 Budget closely for any new tax measures.
