Chambers of commerce across the country are calling for Chancellor Rachel Reeves to focus her second Budget on key growth drivers to lift the gloom that has settled over the economy.
The British Chambers of Commerce Budget submission focuses on policies to encourage investment, strengthen the workforce, support exports and develop infrastructure.
The top four recommendations are:
- No more taxes on business, alongside reforming business rates and the axing of the windfall tax on oil and gas
- Prioritising infrastructure investment and approval, including more rail projects, alongside a new runway at Heathrow and continued support for Gatwick and Luton.
- Supporting exports by cutting customs barriers, funding digital trade and backing new trade accelerators.
- Taking action on chronic skills shortages – including a wage subsidy scheme for young people with long-term health issues.
The submission has more than 60 recommendations in total, based on extensive surveys with thousands of companies, interviews with policy experts across the country and input from large corporates.
The research shows that while the economy is forecast to grow 1.3% in 2025 this will not be enough to shift the dial on investment or fill the Chancellor’s fiscal black hole.
Business confidence crumbled in the aftermath of last year’s budget after businesses were hit with large increases in employment costs and it has not recovered. Inflation has also remained stubbornly above the Bank of England’s target, while the UK’s goods trade deficit has widened and unemployment has climbed.
The BCC’s latest Quarterly Economic Survey has found confidence and investment levels are around the same as 2022.
Less than half of respondents (48%) are expecting increased turnover in the next 12 months, while 21% expect a decrease. In terms of investment, only 21% have put more money into their businesses, while 25%, have scaled back their plans.
Suzanne Caldwell, managing director of Cumbria Chamber of Commerce, said: “Last year businesses bore the brunt of funding the Budget.
“We now need the Chancellor to show that she gets it and stop any further tax rises on business. Right now, businesses cannot plan ahead as they expect further tax demands to be laid at their feet.
“The Chancellor must seize this moment and use her budget to deliver a pro-growth agenda that can restore optimism and belief amongst business.”
Shevaun Haviland, director general of the British Chambers of Commerce, said: “Businesses want to see a tax system that incentivises growth, more support on exports and skills, and commitments on infrastructure, planning and the energy grid that are fully followed through.
“These are the changes that businesses tell us can truly make a difference. They also want the Chancellor to set out a clear vision on the future pathway for taxes, regulation and the levels of support they can expect.
“This budget is a golden opportunity to send a signal to business that she is on their side. The Chancellor can finally give them confidence to invest and grow without the constant edge of fear that their plans will be upended by tax and policy changes.
“These are no small asks, but if the Budget can deliver then the promise of stronger economic growth can finally become a reality.”
