Thursday 10 September 2026 5:00 am
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Wednesday 09 September 2026 6:04 pm
Healey will have to consider a number of proposals from businesses.
The bosses of Britain’s largest industry groups have urged Chancellor John Healey to reduce the cost of business in order to boost growth across the UK economy, City AM has been informed. Several business chiefs sent letters to the Treasury on Wednesday night with demands for the government to relieve pressures on employers. Correspondence landing on Whitehall desks came ahead of a deadline for businesses and lobby groups to engage with the Chancellor on the Budget. Most of the industry bodies in the so-called ‘B5’, which are five of the largest business groups in the country, have centred their proposals on reducing costs for firms, City AM has been informed, echoing Healey’s promise to offer “breathing space” to businesses. But in an unusual step, some representatives have asked the government to be clearer about the costs of some fiscal policy decisions. Industry chiefs and economists have tended to avoid commenting on costs when presenting proposals. The British Chambers of Commerce became the most notable body to call for the replacement of the triple lock pension, which has aggrieved top economists over its cost to public finances due to how spending on the state pension is projected to rise as a share of GDP. Burnham has committed to keep the triple lock pension, as per the Labour Party manifesto in 2024. The Institute of Chartered Accountants in England and Wales, which is not in the B5, urged the government to be clearer about its fiscal rules amid fears that Healey was searching for “flexibility” within the stability rule, which states that day-to-day spending should match tax receipts by 2030. Top accountants said that a clearer definition of the rule would reduce market surprises amid fears among City economists that further borrowing could lead to a further jump in debt interest costs, which are already set to total about £137bn in 2030.One industry chief told City AM that cutting welfare was the main way that the government could deliver on cost reductions for businesses and boost growth prospects. The Office for Budget Responsibility currently believes the UK economy will expand by 1.1 per cent this year and 1.6 per cent in 2027, though more recent analysis from City economists is more pessimistic. Industry chiefs tell Healey to cut taxesBusiness campaigners at the Institute of Directors, one of Britain’s oldest industry bodies, meanwhile said the government should consider long-term effects to government revenue when considering changes to taxes on investment and capital. This warning has come against wide expectations that Healey could target capital gains taxe in order to raise revenue. Some tax experts have suggested that careful changes could boost receipts by billions of pounds a year yet the government has been warned by top tax experts and opposition groups that isolated rises in tax rates could lead to a loss of revenue.Healey will now have to consider proposals made by top industry leaders and weigh up measures to reduce costs against demands to raise defence spending by about £9bn a year and offer households instant relief on the cost of living ahead of a difficult winter of higher inflation.Reducing the number of Neets, which are young people out of employment, education and training , is a recurrent theme addressed by businesses in their proposals.Lobby groups across the retail, recruitment and wider business sectors urged Healey to partly undo Rachel Reeves’ decision to hike employers’ national insurance contributions by £25bn. Alan Milburn, who is conducting a review of Britain’s Neets crisis, will deliver recommendations to the government after the Budget is delivered. Tax cuts may be difficult for Healey to stomach as RSM economist Thomas Pugh is among a number of economists who believe the size of his £23.6bn fiscal headroom has halved due to the energy price shock from the Iran war. One industry researcher said Healey should at least provide a “roadmap” for undoing the tax hikes made by his predecessor which have been blamed for pushing up the youth unemployment rate to as high as 16 per cent. Healey was also told by City bankers to not raise a levy on the sector. Make UK and the Confederation of British Industry, which are both B5 bodies, urged the Chancellor to reduce electricity costs for producers. Offshore Energies UK, which represents major energy giants operating in the North Sea, said a change in taxation from January 2027 on oil and gas revenue could contribute to an increase in capital investment of up to £32bn in the next 10 years and boost energy security. The Treasury has been approached for comment.
