John Healey vows to be a chancellor ‘who backs business’ ahead of Budget

John Healey has said his Budget will look at cutting “the cost of business”, as he promised to be a chancellor who backs entrepreneurs.

Speaking just days before his first major fiscal event, Mr Healey sought to rebuild the damaged relationship between Labour and business, saying he is “conscious” that businesses were also suffering under the cost-of-living crisis

“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,” he told The Times.

Mr Healey also said firms had been under “a lot of pressure” in recent years.

He continued: “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.”

UK government borrowing rose by more than expected to £24.5 billion for last month, underscoring the constraints in the public finances ahead of the Budget.

Mr Healey is facing growing pressure to raise taxes or cut spending at next month’s Budget, as soaring borrowing costs because of the Iran war and weaker growth has wiped billions off the government's fiscal headroom.

It comes after Rain Newton-Smith, chief executive of the major business group, on Wednesday called on Mr Healey to give “business breathing space” in his first Budget.

One option the chancellor is thought to be considering is an increase to the surcharge on bank profits from 3 per cent to 8 per cent, reversing a tax cut for the sector launched by former chancellor Jeremy Hunt.

But Ms Newton-Smith warned that further taxes on the UK’s financial sector would be an “own goal”,

“Our financial services may be centred in London but they support more than 650,000 jobs outside the capital,” she said.

“They add more than £200 billion to our economy every year. They are a great British success story.

“Our financial sector already faces a higher tax burden than other global centres. Adding to that would be an own goal for our competitiveness.”

The trade body boss will also argue that growth comes from “helping struggling sectors, not holding back thriving ones”, pushing for the chancellor to help encourage more private sector investment.

“The Budget next week must be about giving business breathing space and backing wealth creation. Because breathing space gives businesses room to invest. To hire. To innovate. To make the decisions that drive growth in every postcode.

“That means government and business being bold on the practical things that decide whether investment happens here or somewhere else.”