Growth can’t be reserved for London and big cities warns Chancellor as capital set to face tax risesIn a major speech on Monday, Chancellor John Healey will outline plans aimed at driving long-term development across the country
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Rachael Burford, Chief Political Correspondent @RachaelBurford1 minute ago
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Britain’s growth must extend beyond London and other large UK cities, the Chancellor has warned as he prepares to outline his economic agenda.
John Healey is preparing to lay out plans aimed at driving long-term development across the country in a major speech on Monday, ahead of his first Budget on October 28.
He is pressing ahead with major reforms to the Treasury “rule book” to drive investment out of the capital to the regions and is changing the discount rate on which the value of transport, housing and social infrastructure projects is assessed.
Writing in Sunday People, Mr Healey said his plan would seek to deliver progress by supporting local government and town centres.
“But not growth for its own sake – not a number on a spreadsheet. And not reserved for our biggest cities. This is about growth in every postcode,” he wrote.
“Factories across Britain taking on young people. Small business owners finally being able to expand. Town centres and high streets seeing new life.”
Higher UK borrowing costs could threaten Chancellor John Healey’s fiscal headroom at the BudgetPA Wire
Mr Healey added: “Britain already has the strengths it needs to succeed – global financial centres, cutting-edge science and technology, world-class universities, and communities full of ambition. So the question is: What’s stopping us?
“Tomorrow I’ll set out my plan to deliver good growth in every postcode by making the most of Britain’s strengths.
“We’re putting mayors, local government, entrepreneurs and investors at the heart of this plan.”
The comments came a day after Mr Healey also told the Financial Times he would ensure Britain emerges from his first Budget with a solid “buffer against uncertainty”.
He warned this could be tough, as US President Donald Trump’s war in the Middle East affects the UK economy.
Economists have predicted that the fiscal buffer Rachel Reeves built up in her last budget, through a combination of tax rises and departmental spending cuts, will be squeezed by the inflationary pressures of ongoing global turmoil.
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This could limit Prime Minister Andy Burnham’s ambitions to tackle the cost-of-living crisis, and spending plans across his wider agenda for Government.
Londoners are set to bear the brunt of a number of tax rises in the coming months.
Chancellor John Healey Getty
The Labour government has slashed central funding for Wandsworth, Westminster, Hammersmith and Fulham, the City of London and Kensington and Chelsea council, effectively forcing them to significantly raise their low council tax levels next year or drastically cut services.
The Prime Minister has backed former Chancellor Ms Reeves’ “mansion tax” on homes worth £2 million or more, the vast majority of which are in London or the South East.
Mr Burnham has also hinted that he may reform property tax later in his premiership in a move which threatens to hit the capital.
The Chancellor told the FT: “What’s happening in the Middle East is hitting inflation, it’s hitting growth, it’s hitting borrowing costs.”
He added: “It’s part of a more dangerous world that is more uncertain and it’s one of the challenges we have to meet in this country, but have to meet with other (countries).”
Former Tory PM and Chancellor Rishi Sunak warned Mr Healey must cut spending in his first Budget next month rather than hiking taxes.
He argued that the move should be signalled in advance to calm shaky money markets.
Mr Sunak wrote in The Sunday Times: “He should make clear that he’ll not increase taxes in the budget and that if adjustments need to be made, he’ll cut spending.
“That would provide the certainty needed in an increasingly uncertain world.”
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