The British Chambers of Commerce has urged the Chancellor to find
a way to reset business confidence and escape the fiscal cage
that has trapped the UK in a cycle of weak growth.
Successive Budgets have added to
employment, energy, rates and regulatory costs. BCC analysis
shows domestic policy-driven costs for a typical SME have risen
by more than 70% in a decade. Currently, only 17% of firms
plan to increase investment - the lowest level since the
pandemic. The Budget will only be judged a success if this figure
starts to rise.
The Government's pre-Budget
announcements on AI investment and resilience, stronger public
finance institutions and devolved funding for local leaders in
England are welcome signals.
But there have also been a number of
rumours circulating on potential changes which could work in the
opposite direction. Wednesday's test is whether the Chancellor
can release the brakes on private-sector
growth.
Shevaun Haviland CBE, Director
General of the BCC, said:
Businesses have been down this road
too many times before. Successive Budgets have drained their
confidence and left too many investment plans gathering dust on
the shelf.
Wednesday is a huge opportunity to
finally change those dynamics. If the Chancellor raises any taxes
on business, the fiscal cage will simply get smaller: weaker
confidence means weaker investment, weaker growth and less
revenue.
The announcements on AI, regional
growth and investment finance point in the right direction. But
government spending at this level cannot substitute for hundreds
of thousands of firms choosing to hire, expand and
export.
The Chancellor has a real opportunity
to cut the cost of employing young people, ease energy and
business rates pressures, and restore dependable export support
in every English region. Firms also want to see a stable,
long-term tax roadmap with no fresh business tax
rises.
Business is not asking for a blank
cheque. It is asking for breathing space and a fair chance to
grow. Back business now and it will deliver the jobs, investment
and tax revenues that rebuild the public
finances.
On possible changes to
Apprenticeship funding, she
said:
I would urge the Chancellor not to go
down the route of further cuts to funding for higher level
apprenticeships, used to develop more experienced staff. This
would lead to less investment in current employees and reduce the
size of the pipeline for new
apprentices.
On the National Living Wage,
she said:
A slowing in the rate of increase
would be the sensible option, with a gap maintained between the
rates for adults and young people. Labour costs are the biggest
pressure on firms to increase prices. After years of
inflation-busting rises in the national living wage, firms have
little room for manoeuvre, especially on top of National
Insurance and Employment Rights Act
costs.
The BCC's three immediate
priorities are:
-
Employer National Insurance relief
for under-25s
-
A targeted package to reduce
business energy bills and rates
-
Consistent, locally delivered export
support.
These should sit alongside a credible
roadmap for tax, skills, planning, infrastructure and fiscal
devolution.
