John Healey urged to axe state pension triple lock in radical plan to kickstart Britain's economy

A top business group has urged Chancellor John Healey to scrap the triple lock to repair the nation's public finances.

The British Chambers of Commerce (BCC) has said Mr Healey must abandon the state pension pledge in order to save billions.

The Chancellor is set to unveil a £150million fund for fast-growing northern firms as he sets out plans to grow the economy through an "active" state.

However, the BCC has gone further, calling for the triple lock to be scrapped, using the savings to help tackle the youth worklessness crisis that is blighting the economy.

BCC Director General Shevaun Haviland admitted Mr Healey was "in a fiscal bind" going into his first budget but warned further tax rises would be self-defeating.

She told The Telegraph: "The Chancellor must use his first budget to cut the cost of doing business, allowing everyone to reap the economic benefits.

"Piling more taxes on firms would be a road to ruin and the quickest way to destroy business confidence."

The BCC said abandoning the triple lock and raising the state pension by inflation each year could save the Exchequer £3.3billion over two years, urging Mr Healey to use the savings to cut employers’ National Insurance Contributions for 21 to 24-year-olds.

Labour is coming under further pressure from the Office for Budget Responsibility (OBR), who said the lock will have cost £15.5billion a year by the end of the decade, three times more than expected in the early 2010s.

Former OBR boss Richard Hughes has warned the triple lock and other age-related spending pressures mean the “UK public finances are in an unsustainable position”.

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John Healey to tell 'optimistic story' in speech later today

John Healey will seek to tell an “optimistic story” about Britain in a major speech on Monday, echoing Prime Minister Andy Burnham’s push to strike a more upbeat note than his predecessor.

The Chancellor ill detail plans to spread growth more widely across the UK by using public investment to attract private capital.

The British Business Bank will commit up to £150million to a new fund “to get behind the most innovative and fast-growing firms”, Mr Healey will say.

The pot, using money already allocated to the Government-owned bank, will offer investments of between £5million and £15million to help university spin-outs and other innovative companies across the North of England expand.

The Treasury hopes the fund will draw in additional private cash, as part of Mr Healey’s vision of an "active state" working with private businesses to create opportunity.

Mr Healey will also task the British Business Bank and National Wealth Fund with doing more to support investment and innovation across the UK.