Prime Minister Andy Burnham and Chancellor John Healey engaged with leading business figures this week to alleviate concerns about potential tax increases ahead of the UK Budget scheduled for October 28. Speaking to chief executives at separate meetings held at Downing Street, both officials emphasized a commitment to fostering economic growth while signaling that fresh tax hikes on businesses were unlikely.

Burnham, who previously served as mayor of Greater Manchester, framed his administration’s approach as distinctly pro-business, distancing himself from traditional socialist economic policies. “For 10 years I ran the most pro-growth and pro-business city in the UK,” he told attendees, according to officials, adding that he now aims to lead “the most pro-growth and pro-business country in the world.” The prime minister encouraged business leaders to “bring back optimism” and promote a positive outlook on the UK’s economic prospects.

The chancellor’s engagement with retail industry leaders reinforced this message, with Healey reassuring executives that no further tax burdens would be placed on the sector. However, those leaders were told that calls to reduce employment costs, particularly in relation to youth employment, would not be addressed before the Budget’s announcement. The increase in national insurance contributions (NICs) in the 2024 Budget has already been linked to significant job losses in retail; Helen Dickinson, chief executive of the British Retail Consortium, referenced an estimated 200,000 jobs lost since the NICs rise and urged the government to make it less costly to hire young workers.

Businesses attending the meetings also highlighted high energy costs as a pressing concern. Burnham indicated that a long-term, 10-year strategy would be developed to tackle this issue, reflecting the government’s intention to provide stability and forward planning.

A central focus for business leaders was the need for greater certainty and predictability in fiscal policy. One attendee from the Number 10 discussion noted that reducing unpredictability from one Budget to the next, particularly concerning capital gains tax (CGT) and broader business taxation, was their top priority. Earlier reports had suggested that some senior figures within the Labour Party sought to align capital gains tax rates with income tax rates, but Healey reportedly dismissed this proposal.

With anticipated increased public borrowing linked to the ongoing conflict in Iran, which is projected to widen the fiscal deficit by around £12 billion, Healey is expected to utilize the existing £23.6 billion fiscal buffer, avoiding significant tax rises for businesses to address the shortfall. Further discussions between government officials and business representatives are planned, particularly focusing on youth unemployment following the upcoming review led by Alan Milburn, which may influence future policy on employment costs.

Overall, the meetings aimed to reassure the business community amid economic uncertainty, signaling a cautious approach by Burnham’s government that balances fiscal challenges with a desire to maintain a business-friendly environment.