Budget
WE’RE calling on the CHANCELLOR TO use his first budget to CUT THE COST OF DOING BUSINESS
The Government wants good growth in every postcode. That will only happen if businesses feel confident to invest, recruit and trade.
Right now, that confidence is being crushed by ever-increasing costs.
why this matters
Britain cannot achieve stronger economic growth while Government-driven costs for businesses keep rising.
At the Budget, we urge the Chancellor to back business by cutting these costs, boosting confidence, and creating the right conditions for firms to invest, hire and grow.
- Britain is becoming too expensive for business. You cannot grow an economy by making it less competitive.
- High costs are choking business confidence. As costs keep rising, confidence is falling and growth stalling.
- Lower costs. Higher growth. The best way to unlock growth in every postcode is to reduce the cost of doing business.
at the budget, the chancellor has the opportunity to:
A COST OF DOING BUSINESS CRISIS
A typical mid-sized firm (50 staff, £5m turnover) now pays around £1.98m a year in domestic policy-driven costs, up from £1.16m in 2016. An overall increase of £827,000.
- Successive Governments have made policy decisions which have added to these business costs. These include increases to Employer NICS, successive National Living Wage rises, business rates changes and new compliance obligations (e.g. Making Tax Digital).
- The problem is structural. We have seen a permanent step-change in the cost of doing business. After adjusting for inflation, the cost stack has risen from around 32% to 40% of a typical firm's revenue.
- The 2024 changes to employer National Insurance were a seismic moment and hit business confidence hard. They accounted for a quarter of the entire decade’s increase. We are yet to see a meaningful recovery.
- Costs dominate business concerns. Labour costs are the number-one price pressure for 70% of firms. Investment intentions are now at their lowest level since the pandemic.
Try our cost stack calculator
Use the Cost Stack Calculator to see how rising UK policy costs have affected your business and help build the evidence for change.
WHAT BUSINESS WANTS TO SEE FROM THE BUDGET
The message from business is clear. If the Government wants to see good growth in every postcode, then this needs to be a Budget that cuts, not adds, to the cost of doing business.
The BCC will publish our detailed budget asks and submission in mid-September.
A GROWTH DELIVERY TEST
Working with our President, Andy Haldane CBE, we have developed a ‘growth delivery test’, to frame policy development in the run up to the Budget and beyond.
The concept is straightforward: before major policy, regulatory or spending decisions are made, Departments should be required to demonstrate how they support – or at the very least do not hinder – business investment, job creation and productivity growth.
making the case to lower the cost of doing business
Our three drivers to growth
Trade
One of the fastest routes to growth by prioritising markets and sectors, removing export barriers, and supporting international business success.
Investment depends on the right fiscal and regulatory conditions, including tax, planning, energy costs, connectivity, finance access, and growth incentives.
Investment
Productivity drives growth and skills, with the Employment Rights Act and AI developments shaping workplace productivity as key priorities.