The UK stands on a precipice – this Budget must show government is on the side of business
The message from British business could hardly be starker: we need stability, simplicity and long-term thinking – not another round of stop-start policymaking, says Alan Vallance
The UK stands on a precipice. After years of sluggish growth and wavering confidence, businesses are clear: small tweaks and short-term gestures from government won’t be enough to turn the tide.
New research from ICAEW shows that 81 per cent of the members we surveyed believe that unless tomorrow’s Autumn Budget signals a clear change of course, the government will not be able to deliver the conditions the UK needs for growth. The message from British business could hardly be starker: we need stability, simplicity and long-term thinking – not another round of stop-start policymaking.
Our members – chartered accountants who advise more than three million businesses across every region and sector – are on the front line of the economy. They tell us that uncertainty in government policy is now one of the biggest barriers to growth. Eighty-four per cent of respondents cited policy uncertainty as a barrier to growth, while a majority of respondents pointed to the overall tax burden and the complexity of regulation as causing a block.
For a country that wants to encourage innovation, expansion and risk-taking, we make it far too difficult for firms to plan ahead. Each shift in policy chips away at confidence, leaving businesses hesitant to invest and expand. The result is an economy that is surviving, not thriving. And with three-quarters (76 per cent) of respondents saying government talks about growth but doesn’t listen to those expected to deliver it, the message is clear: it’s time to rebuild trust.
A moment for boldness, not tinkering
If the government is serious about its growth mission, this Budget must show that it is on the side of business – not just in words, but through credible, consistent policy.
That means starting with a cast-iron commitment to no further business tax rises in this Parliament. Businesses can’t invest in growth if they don’t know what taxes they will be paying from one year to the next.
It also means publishing a long-term business tax roadmap that outlasts political cycles, giving businesses a stable framework to plan, hire and invest. And it requires the courage to reform systems that have long been unfit for purpose – from reforming business rates, which 44 per cent of firms see as a barrier to growth, to addressing the complexity of VAT, cited by 43 per cent of respondents.
Improving HMRC service performance is another essential step. More than three-quarters (78 per cent) of businesses say faster responses and fairer treatment would support business growth. Businesses need timely, fair treatment from the tax authority – not delays and uncertainty that tie up cash flow and energy.
These are not radical demands. They are pragmatic measures that would signal to businesses that Britain is a place to invest, hire and grow.
Reeves must demonstrate that government is on the side of business
The Chancellor faces a pivotal moment. She can use this Budget to demonstrate that government is firmly on the side of business – not just in rhetoric, but through a clear, long-term plan that restores confidence and encourages investment.
Economic growth will require the country’s businesses to be confident, to innovate and to invest. If the UK is to thrive, policymakers must work hand in hand with those who create the jobs, make the investments and generate the tax base that sustains our public services. That is how we build a stronger, more resilient economy for the future.
Alan Vallance is chief executive, ICAEW