Healey Targets Business Costs in First Budget Amid Rising Borrowing
Chancellor to focus on entrepreneurs and profit, with banks reportedly facing increased taxes as government borrowing surges.
Carla Rooney
Chancellor John Healey will deliver his first Budget focused on reducing business costs and supporting entrepreneurs.
Healey declared his intent to serve as a chancellor who champions profitable British businesses. He also backs entrepreneurs who challenge the status quo and develop innovative ideas, acknowledging the intense pressures they face.
"I want to be a chancellor who backs business in Britain making a profit, and those entrepreneurs who, in the end, are the ones who challenge the status quo, come up with innovative ideas and are trying, some of them through sheer bloody-mindedness, to keep going through these sorts of pressures," Healey stated.
I want to be a chancellor who backs business in Britain making a profit, and those entrepreneurs who, in the end, are the ones who challenge the status quo, come up with innovative ideas and are trying, some of them through sheer bloody-mindedness, to keep going through these sorts of pressures.
Healey drew a direct parallel between business and household financial strains. "And so when I talk about the cost of business, and recognising that in the same way as we’re recognising the cost of living pressures, I’m conscious of that as I go into [the budget] for both businesses and households."
Despite these stated aims, the government considers raising the tax surcharge on bank profits. The proposed increase moves the rate from 3 per cent to 8 per cent, placing banks in the firing line for a revenue raid.
Analysts expect the Bank of England to increase interest rates next month, with another potential hike in December. The boss of Sainsbury's urged Chancellor John Healey not to impose further burdens on British businesses.
Soaring borrowing costs, linked to the Iran war and weaker growth, reduced the government's fiscal headroom. The previous administration, under Rachel Reeves, imposed national insurance hikes on employers, raising the rate from 13.8 per cent to 15 per cent.
That administration also cut the threshold for employers paying national insurance to £5,000 from £9,100. Figures from the British Chambers of Commerce indicate 71 per cent of businesses currently struggle to hire staff.
71 per cent of businesses currently struggle to hire staff.
Ofgem's energy price cap will climb by nearly a quarter in January, the Bank of England reported. Economists claim Healey could benefit from a windfall due to higher inflation, which will pull more people into the tax system as thresholds remain frozen until 2031.
Reporting requirements will likely be abolished for many smaller enterprises. The Labour Government previously approved drilling for gas at the Jackdaw site in the North Sea.