A leading City trade body has warned Chancellor John Healey that raising taxes at the October Budget would set the UK on the "road to ruin".

The British Chambers of Commerce (BCC), which represents tens of thousands of businesses across the UK, has urged the Chancellor not to "pile more taxes on firms," arguing instead that the Treasury should cut the costs facing businesses in order to secure economic growth.

"The Chancellor must use his first budget to cut the cost of doing business, allowing everyone to reap the economic benefits," said Shevaun Haviland, the BCC's director general. "Piling more taxes on firms, would be a road to ruin, and the quickest way to destroy business confidence."

The intervention comes amid sustained pressure on business groups over rising employment and energy costs, which firms say are weighing on investment and hiring.

The industry body has set out a list of demands for the Chancellor, including helping young people back into work, cutting business energy bills and setting a roadmap to reduce taxes.

Ditch triple lock to lower employment costs, Healey urged

The BCC has said that slashing employment costs is one of the biggest actions Healey could take to soften the headwinds facing British firms.

The government should fund cuts to employer National Insurance Contributions (NICs) for all under-25-year-olds by replacing the triple lock on the state pension, the trade body said. The triple lock guarantees that the state pension rises each year by the highest of inflation, average earnings growth, or 2.5 per cent.

In recent months, leading economists and former government ministers have ramped up pressure on the government to scrap the triple lock, which they argue is becoming an unsustainable drain on the public finances.

Lord Jim O'Neill, a former economic adviser to Andy Burnham who turned down a formal role in his government, has urged the Prime Minister to curb the "excesses of the triple lock".

Former Conservative Chancellor Jeremy Hunt told City AM in June that the triple lock has become an "anchor-drag" on growth and must be ditched.

'Back business and cut costs'

The BCC has also called on the government to set out a "targeted tax reduction package" to ease the pressures on firms caused by energy costs and business rates.

The Treasury should fund 75 per cent of the Renewables Obligation, a scheme requiring firms either to source a set amount of their energy from green sources or pay a penalty, the BCC said.

The trade body is urging the government to lower all business rates multipliers, the rates used to calculate bills based on a property's rateable value. Last week, the boss of John Lewis warned Andy Burnham to swerve a "terrible" hike to business rates multipliers for the biggest high street businesses.

"We know the government is in a fiscal bind and its choices are limited. But support for business is not just money out the door, it generates vital economic returns. Easing cost pressures will give firms breathing space to create jobs, investment and growth," Haviland said.

"Pro-growth choices have never been more urgent. The Chancellor must back business, cut costs and deliver growth."

The Chancellor's response to these demands is likely to shape relations between the government and business groups in the run-up to the October Budget.