Government should fix ‘stubbornly weak’ growth with policy test, industry body argues
The British Chambers of Commerce (BCC) is calling on the government to break decades of low economic growth by introducing a new delivery test, as businesses continue to slash investment under the burden of mounting costs.
In the BCC diagnoses, the UK’s growth problem is not a lack of potential but a failure to turn potential into action.
“The UK has the ingredients of growth already in place: resilient firms, strong private sector balance sheets, high levels of innovation, deep pools of capital, and a globally respected business brand,” it states.
The report also warns that firms have “not lost ambition” but instead “lost confidence that the economic environment rewards it”.
The BCC’s proposal for a Growth Delivery Test calls for policymakers to introduce a prior test to ensure any new policy will actually change business behaviour instead of evaluating it following implementation.
The latest intervention comes after businesses have operated in a bruising environment for the last few years, with policies such as the employer’s national insurance raid and Employment Rights Bill hammering firms.
Costs and skills shortages amid litany of business pressures
Figures last week showed the UK economy contracted 0.1 per cent in April as the energy price shock from the Iran war took its toll on businesses and consumers.
In the first quarter of 2026, just a fifth of firms increased investment plans whilst the rest held steady or slashed investment, according to the BCC. Meanwhile, labour costs (at 73 per cent) and taxation (at 54 per cent) remained the top cost pressures.
“Our businesses are innovative, ambitious and resilient. But after years of rising costs, skills shortages, regulatory pressure and economic uncertainty, too many now believe the risks of growth outweigh the rewards,” Andy Haldane, economist and president of the BCC, said.
In the report, more than two-thirds of firms said better access to skills would be the biggest factor to directly support growth in their business.
“Growth depends on businesses choosing to invest, hire, train, adopt new technologies, enter new markets and scale,” Haldane said.
“If too few firms make those choices, economic growth will remain stubbornly weak”.