Shevaun Haviland, the director of the British Chambers of Commerce (BCC), has warned that resilience alone will not drive growth in the UK. In an article for City AM, she urged the government to cut costs for businesses ahead of the upcoming Autumn Budget. Haviland stated that business owners are questioning the Labour government's focus on resilience. She asked, "Was it all worth it?" She emphasized the need for policymakers to reduce costs instead of adding to them.
Key Details
The BCC has highlighted a "cost of business crisis" affecting the UK economy. According to the group, government policies related to the living wage, pension auto-enrolment, and employment taxes have increased costs for mid-sized businesses by over 75% in the last decade. Haviland noted that firms are ramping up lobbying efforts as they prepare for a challenging budget from new Chancellor John Healey. He faces pressure to address cost-of-living issues and implement various spending pledges.
Background
Haviland criticized a decade of domestic policy decisions that have led to rising costs for businesses. She pointed to increases in minimum wage, employer National Insurance, business rates, and other levies as contributors to a growing cost burden. The BCC's new Cost Stack Calculator allows businesses to see how much these policy-driven costs have risen over the past ten years. For a typical SME with 50 employees and £5 million in turnover, costs have increased by more than 70% during this period.
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Rising operational costs for UK businesses could lead to reduced investment and hiring. This is particularly true in sectors like manufacturing and hospitality. Investors will watch for the government's response in the Autumn Budget. They are especially interested in potential tax changes and cost-cutting measures that could ease pressures on businesses.
Based on reporting by: cityam.com