Healey’s Budget must back business to deliver growth

The firms I meet every day tell me they want to invest, hire, and export. What they’re lacking is sufficient confidence to take the plunge. Rising costs, economic shocks and uncertainty have hit businesses hard.

This isn’t a new problem; it’s been brewing for more than a decade. Our research shows that, for a typical SME, the cost stack from domestic policy decisions has risen by over 70% in the past ten years. And recent decisions, such as the employer national insurance increase, have made a bad problem even worse. The impact of these costs is clear in our surveys. When we spoke to 5,000 firms in the second quarter, only 17% said they planned to increase investment over the coming months.

In his recent speech in Coventry, the Chancellor rightly recognised that the cost of doing business is hitting growth. After diagnosing the problem, he must now use next month’s Budget as an opportunity to help administer the cure.

We’re asking the Chancellor for three immediate steps from October 28th. First, we need action to deal with the youth unemployment crisis. Extending the employer national insurance zero rate to all under 25s would reduce the cost of hiring and get more young people into work. To fund the NICs cut, the government should consider all options, including changes to the triple lock, while still ensuring pensions rise with inflation.

Secondly, the Chancellor must cut the cost of doing business, by providing immediate relief on energy and business rates. High energy costs are eating into investment budgets, while business rates continue to tax firms before they have even generated a profit. Giving firms the ‘breathing space’ they need will help unlock investment and boost the economy.

And thirdly, we need more support for firms to export. It is the quickest way to drive economic growth. Trading around the world isn’t just about big business, it’s about SMEs in our communities selling goods and services to global customers. We need the Chancellor to restore locally delivered consistent export support across the UK, so firms can reach new markets and grow faster.

These are three clear, immediate Budget asks to help businesses invest, hire and trade. However, short-term action must sit alongside a longer-term vision from government. A vision that includes creating a tax system that rewards investment. A vision that includes faster delivery of infrastructure. A vision that includes developing a skills system that equips people for the jobs of tomorrow. As an organisation rooted in our local communities, we can help deliver that vision through our Chamber network, as power is devolved from Whitehall.

Building a stronger economy in every postcode is only possible with business. Growth is created by the decisions firms make every day, in our membership and beyond. Budgets are about choices. Next month, the Chancellor must ‘Back Business, Cut Costs and Deliver Growth’.

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Shevaun Haviland is Director General of the British Chambers of Commerce.

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