Business feels ‘beaten up’, Burnham ally says

Lord Jim O'Neill, a prominent ally of Andy Burnham, has expressed concern that businesses are feeling "beaten up" as he cautioned the Prime Minister against further taxation of British companies. During a Treasury Select Committee hearing, O'Neill staunchly opposed proposals for capital gains tax increases, arguing that they could negatively impact business confidence and investment.

He stressed that any tax increase must be carefully considered, particularly capital gains taxes. O'Neill, a former Goldman Sachs chairman and Treasury minister, stated he wouldn't support taxes on banks, but he would be more opposed to higher capital gains rates. He also suggested the UK economy might be performing at a 2% annualized growth rate, bringing it back to levels not seen since before the 2008 financial crisis.

O'Neill acknowledged that productivity growth had been higher than previously estimated, which could explain this strong performance. He credited Rachel Reeves' recent decision to raise national insurance contributions paid by businesses as potentially being a "shock" that has indirectly boosted productivity. O'Neill also backed former Bank of England economist Andy Haldane's call for tax incentives to encourage pension funds to invest in UK assets.

Burnham and Chancellor John Healey pledged to be "the most pro-business country in the world," but provided little detail on their plans. Healey is considering measures to lower hiring costs for employees under 25, but such steps would need approval from the Office for Budget Responsibility.