Taxes are hammering businesses in the UK, says industry leader
For the government to achieve its growth mission, people need to stay in work and businesses need to invest. As always, businesses soak it up and move forward, but they feel like they are wading through treacle.
This is the view of Shevaun Haviland (Director General of the British Chambers of Commerce) who was speaking at the group’s annual conference on Thursday (26 June).
“The reality of British business is hard, it’s relentless, it’s knackering, it’s being endlessly creative, it’s seven days a week and it’s absolutely essential for the UK’s future prosperity,” she said.
“So, it has not been helped by the Treasury demanding that businesses plug the black hole in its finances. The size and scale of the rise in National Insurance Contributions took businesses by surprise.
“We were unprepared for the huge burden placed upon us, and it led many of us to rethink our growth plans. As a result, our business confidence measures have fallen to their lowest levels since 2022.”
Haviland noted that this was not just a tax issue but also ensuring that business-friendly legislation is introduced. She pointed to the planned Employment Rights Bill, which is set to have a £5 billion price tag for businesses.
The cost of doing business
Haviland noted that the British Chambers of Commerce asked 600 businesses what policies would most boost growth in the UK over the next five years. Some of the answers include:
- The cost of doing business: The government needs to use the tax system to incentivise growth, not kill it. Increased taxation is paralysing business. One in five of the British Chambers of Commerce’s members say business rates are stifling growth.
- Regulation: Businesses want guiding principles to ensure they are operating appropriately, but too much red tape is an unnecessary burden. As the law stands at the moment, as a tenant in a block of flats, it is simpler to get permission to have a dog in your home than it is to get broadband. Yet making it easier to upgrade the UK’s ultrafast broadband network could boost the economy by £66 billion.
- Skills and training: With almost a million people aged 16-24 not in work, education or training, this must be fixed. The UK needs to bring the workplace into education and young people into our workplaces before they drop out of the classroom, linking up the worlds of education and business like never before
