Growth can't be reserved for London and big cities warns Chancellor as capital set to face tax rises

Britain’s growth must extend beyond London and other large UK cities, the Chancellor has warned as he prepares to outline his economic agenda.He is pressing ahead with major reforms to the Treasury “rule book” to drive investment out of the capital to the regions and is changing the discount rate on which the value of transport, housing and social infrastructure projects is assessed.Writing in Sunday People, Mr Healey said his plan would seek to deliver progress by supporting local government and town centres.“But not growth for its own sake – not a number on a spreadsheet. And not reserved for our biggest cities. This is about growth in every postcode,” he wrote.“Factories across Britain taking on young people. Small business owners finally being able to expand. Town centres and high streets seeing new life.”Higher UK borrowing costs could threaten Chancellor John Healey’s fiscal headroom at the BudgetPA WireMr Healey added: “Britain already has the strengths it needs to succeed – global financial centres, cutting-edge science and technology, world-class universities, and communities full of ambition. So the question is: What’s stopping us?“Tomorrow I’ll set out my plan to deliver good growth in every postcode by making the most of Britain’s strengths.“We’re putting mayors, local government, entrepreneurs and investors at the heart of this plan.”The comments came a day after Mr Healey also told the Financial Times he would ensure Britain emerges from his first Budget with a solid “buffer against uncertainty”.He warned this could be tough, as US President Donald Trump’s war in the Middle East affects the UK economy.Economists have predicted that the fiscal buffer Rachel Reeves built up in her last budget, through a combination of tax rises and departmental spending cuts, will be squeezed by the inflationary pressures of ongoing global turmoil.Read MoreThis could limit Prime Minister Andy Burnham’s ambitions to tackle the cost-of-living crisis, and spending plans across his wider agenda for Government.Londoners are set to bear the brunt of a number of tax rises in the coming months. Chancellor John Healey GettyThe Chancellor told the FT: “What’s happening in the Middle East is hitting inflation, it’s hitting growth, it’s hitting borrowing costs.”He added: “It’s part of a more dangerous world that is more uncertain and it’s one of the challenges we have to meet in this country, but have to meet with other (countries).”Former Tory PM and Chancellor Rishi Sunak warned Mr Healey must cut spending in his first Budget next month rather than hiking taxes. He argued that the move should be signalled in advance to calm shaky money markets. Mr Sunak wrote in The Sunday Times: “He should make clear that he’ll not increase taxes in the budget and that if adjustments need to be made, he’ll cut spending.“That would provide the certainty needed in an increasingly uncertain world.”