London business chiefs have urged Andy Burnham not to “harm” the capital with his landmark rebalancing of Britain’s economy. The Prime Minister-in-waiting is expected to channel billions more in public spending to the regions as he seeks to boost their economies, triggering a warning from Sir Sadiq Khan not to cut investment in London.
Burnham’s Promises and Concerns
Former Greater Manchester Mayor Mr Burnham is stressing the benefits to London of his reforms, including easing upward pressure on house and flat prices by reducing UK migration to the capital. He has also pledged to cut transport fares in London and build more affordable homes across the city. However, former Cabinet minister Mr Burnham has yet to say how he will fund many of his measures, so bosses are concerned he may hit businesses with a new wave of tax rises. He has also previously backed replacing council tax and stamp duty with a new property tax, which could hit London with an extra £7.5 billion bill a year.
LCCI’s 10-Point Plan
The London Chamber of Commerce and Industry (LCCI) published a ten-point plan to boost the capital as Mr Burnham is set to become PM on July 20, unless there is a surprise challenger for the Labour leadership. The plan includes:
- A commitment not to increase taxes, red tape or employment costs on businesses.
- Reversing Chancellor Rachel Reeves’ £20 billion hike in National Insurance contributions for employers, which is widely blamed for hitting many businesses, the high street and the UK economy.
- Major reform to business rates, including lowering the multiplier to at least 45p, to support the retail and hospitality sectors, and recognising that the higher rate threshold does not fairly reflect London property prices.
- Designate King's Cross as an AI Investment Zone and create the right regulatory and market conditions to make the existing Elizabeth Line tech corridor the most attractive area in Europe for next-generation AI investment, creating thousands of high-skill jobs.
- Back airport expansion at Heathrow, Gatwick and Luton airports, as well as the Bakerloo Line and DLR extensions.
- Abolish the “tourism tax” by restoring VAT-free shopping, and reverse changes to the non-dom system, making London the first choice for international visitors, spending and talent.
- Get London building by cutting the burden of the planning system to increase housebuilding, reduce investment costs and support commercial developments.
- A “pragmatic” new deal with the EU to improve mobility for skilled workers and make it easier for businesses to operate across borders.
- Tackle business crime effectively, backed by a fairer funding settlement for the Met Police.
- Act swiftly on the Milburn Review into individuals not in education, employment or training and reduce the cost of hiring young people.
Industry Reaction
Karim Fatehi, chief executive of the London Chamber of Commerce and Industry, said: “Andy Burnham is right that Britain needs growth in every postcode. London is the world's greatest capital city, and we know that when London's economy grows, the whole country benefits. It is vital the new Prime Minister does not make policy and funding decisions for political reasons that harm the capital.”
Mr Fatehi added: “Firms across London have been left bruised from recent tax increases and an unsustainable increase in the cost of doing business. They need certainty, stability, and a clear plan for growth. The priorities for the next Prime Minister we have set out would not only get London growing, they would help deliver growth and prosperity for the whole country.”
