Third of big investors ready to pause UK spending if Healey raises taxes sharply, survey finds

A third of large investors and companies would consider pausing or cutting spending in the UK over the next 12 months if the chancellor’s budget brings a sharp tax rise, according to a survey of financiers controlling more than £30 trillion of assets (The Times).

The poll of 100 senior executives — managing directors, vice-presidents and chief officers at large financial and corporate organisations, each responsible for at least £5 million of annual capital allocation — was carried out by YouGov for Teneo, a public affairs firm, in July. Thirty-two respondents said a “sharp tax rise” on companies or investors would cause them to “consider pausing, reducing or stopping all UK investment over the next 12 months”.

More than half — 58% — said Britain had become a less attractive place for investment decision-makers over the past five years, against 28% who said it had become more attractive. And 78% said ministers were not giving them a strong enough reason to commit capital.

John Healey is preparing to increase taxes on banks, backed by some think tanks and Labour MPs, to help fill a hole in the government’s finances left by rising borrowing costs. His first budget, to be delivered on October 28, will also involve extra spending, including support for poorer households with energy bills and funding to reduce homelessness.

The results show Britain is “losing ground” in the battle to woo investment, said Iain Dey, Teneo’s senior managing director and co-head of UK financial communications.

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