Higher taxes mean higher prices - and a Christmas no one can afford

Across London, cafes, barbers, florists and family-run shops are hanging up decorations while quietly wondering if they’ll break even this December. They’re working 70-hour weeks to make sure that their customers have a good Christmas, while wondering if they can afford one themselves.

The Chancellor has made it clear that businesses can expect tax rises in the upcoming Budget. That would be a mistake.

London businesses need a Budget that backs them, not one that burdens them. Business rates in London are already among the highest in the country, placing a heavy burden on firms trying to grow and create jobs.

Rachel Reeves promises stability and fairness, yet every tax rise threatens the very investment and growth Britain needs to rebuild its economy. In a recent survey of the London Chamber of Commerce and Industry (LCCI)’s members, six in ten firms said higher taxes would harm growth, while nearly half said they would have no choice but to raise prices, fuelling inflation further and making Christmas more expensive for everyone.

Small businesses are the backbone of our economy. Most of us work for them. London’s 900,000 firms, most of them SMEs, generate around 20 per cent of the UK’s GDP. They train young people, bring vibrancy to communities, and drive innovation. When they thrive, Britain thrives. When they stall, the whole economy stalls with them.

Across LCCI’s 11,000 members, it’s the small firms that are feeling the greatest pressure. They’re the family-run coffee shops, the gift shops where you buy thoughtful, well-made Christmas presents, the small logistics firms delivering your Christmas parcels.

They want to invest in new equipment, take on apprentices and expand into new premises, but they’re being held back by a system that has stalled confidence and hampered productivity.

These small business owners tell me every day that they need a stable, predictable tax system that encourages investment, not one that piles on new costs they can’t afford. They want to know that when they reinvest every pound they earn, they won’t be penalised for it. Critically, they want to plan beyond next month.

The best gift the Chancellor could give our city this Christmas is stability: a Budget that supports enterprise, encourages investment and secures London’s role as the driver of national growth. Because if the government keeps taxing ambition, the lights on our high streets will not just dim for Christmas, they may go out for good.

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Karim Fatehi OBE is CEO of the London Chamber of Commerce and Industry.

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