The Chancellor has been warned that Britain ‘cannot tax its way to prosperity’ and must back business or face a ‘generation of stagnation’.
In a report ahead of the Budget, wealth manager Rathbones urged John Healey ‘to put restoring business confidence’ at the heart of his plans.
It called for reforms to business taxation – including the business rates system – and stamp duty on house purchases.
The company also urged the Chancellor to resist calls for an annual wealth tax or hikes in capital gains tax while boosting investment in British firms through pension funds.
‘The country cannot tax its way to prosperity and should instead focus on supporting business, investment and economic growth in the Budget,’ the report said.
‘Uncertainty and rising costs risk creating a generation of stagnation, without the enterprise and investment needed to strengthen the economy.’
Andy Burnham and John Healey are under pressure from business ahead of the Budget
A separate report by the Association of Investment Companies (AIC) urged Healey to ‘set out a path to removing stamp duty’ on share trading in the Budget.
The AIC said its research found nearly three quarters of British investors, some 74 per cent, believe it is important to support the UK by backing UK companies.
But investors currently pay 0.5 per cent in stamp duty when buying UK-listed shares – a levy that does not apply to buying shares in foreign companies.
So, a saver who buys £10,000 of shares in Rolls-Royce or Marks & Spencer pays £50 tax – but nothing on shares in SpaceX or Microsoft.
AIC chief executive Richard Stone said: ‘We need UK investors to back the UK. Our research shows that investors do see the connection between the investments they make and the health of our economy.
‘There is potential for the Chancellor to turn this economic patriotism into real money when he delivers his Budget this week.
‘Setting out a path to remove stamp duty would make it an easier decision for UK investors to back home-grown companies and investment trusts.’
The last-ditch pleas ahead of the Budget on Wednesday follow a string of warnings from business leaders over the impact of rising taxes and higher costs on hiring and investment.
Writing in the Daily Mail this month, Marks & Spencer chief executive Stuart Machin branded Rachel Reeves’ two Budgets as Chancellor a ‘disaster’ and urged Healey to ‘take the handcuffs off business’.
Camilla Stowell, chief executive of Wealth at Rathbones, said: ‘The central challenge facing the Chancellor is how to restore sustainable growth; the answer cannot simply be to keep asking businesses and individuals to pay more.
‘Economies need to grow out of high debt burdens, and that means backing the people, businesses and investment that create jobs, generate tax revenues and build prosperity across the country.
‘Our clients include business owners, professionals, investors and families whose ambition and success support businesses, organisations and communities throughout the UK.
‘Many are ready to invest, expand and plan for the future, but they need stability, confidence and a policy environment that rewards enterprise rather than constrains it.’
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