The British Chambers of Commerce (BCC) has sent the Prime Minister a Business Manifesto to get firms through the tough months ahead and then power the UK’s economic recovery.
Businesses are the very bedrock of the economy but currently face a host of challenges which threaten the survival of many; eyewatering energy bills, labour shortages, 40-year high inflation, and rising interest rates. The Bank of England is now also forecasting a two-year recession.
The BCC’s latest Quarterly Economic Survey highlighted an alarming drop in business confidence and conditions, with key economic indicators falling back to Covid-crisis levels. One in three firms reported a decrease in cashflow, while 25% reported a decrease in domestic sales.
In the wake of the October fiscal statement, the BCC conducted a snap poll of almost 500 firms, to assess the extent to which the Chancellor’s plans would impact their investment intentions.
Overall, only 6% of businesses said they would increase their investment, while 37% said they would decrease it as a result of the fiscal statement.
The BCC’s Business Manifesto sets out 17 key policies designed to tackle the challenges facing businesses across the economy, the labour market, international trade and Net Zero.
Top of the list for urgent action are:
Investment in infrastructure
Government must prioritise long-term growth by financing public projects, with a particular emphasis on green and digital infrastructure. As a result of the Multiplier Effect, investing in public infrastructure, such as the HS2 rail link, will have a high value impact on growth; stimulating local economies and creating jobs across the UK.
Energy support for businesses
Rising energy costs is the number one concern cited by businesses. Government must provide certainty on how the energy support package will work from April so that businesses can plan for the future.
Tackling the tight labour market
There are currently 1.2 million unfilled jobs in the UK labour market, meaning businesses must turn new work away. Government must promote the creation of a skilled workforce by offering tax breaks to businesses that invest in training and upskilling. The UK also needs an immigration system that caters to the needs of the labour market. A reform of the Shortage Occupation List is urgently required to help businesses fill job vacancies when they cannot recruit locally.
Promoting export-led growth
More than a quarter (28%) of SME exporters reported decreased sales in Q3 of this year. International trade presents significant opportunities for UK businesses to expand and grow. However, barriers to trade must be removed in order to allow firms realise their full trading potential. The UK Government must work with the European Commission to reach a negotiated solution on business compliance burdens with the Protocol on Ireland/Northern Ireland.
Presenting the BCC Business Manifesto, Shevaun Haviland, Director General of the BCC, said:
“Our research indicates business confidence has plummeted to alarmingly low levels, not seen since the height of the pandemic. The political and economic uncertainty over the past few months, and the turbulent financial conditions following the Government’s mini budget have damaged this even further.
“We are now on borrowed time, and the new Prime Minister must step up to the plate. Businesses can’t afford to see Government make any knee-jerk decisions that damage long-term growth. It must create stable conditions for businesses to invest and grow, otherwise we will be starting from a very weak base to power our recovery once global economic conditions stabilise.
“With a new Government and Prime Minister at the head of the table, it is high time we saw a long-term growth plan that involves investment in people and skills; supports businesses to adapt and thrive; and builds good relationships with our global allies to get British businesses selling again.
“In the remaining period of this Parliament, the BCC urges the Government to strike the right balance for growth without compromising our great public institutions that so many of us rely on.
“People run businesses and businesses rely on people. This Business Manifesto offers solutions, including cost-free options, to get our economy moving in the right direction again.”