Business groups want to see Budget for Growth

Chancellors are fond of using the name a ‘Budget for Growth’ for their fiscal statements to the point where it has become a cliché. However, if Rachel Reeves follows this path when she delivers her first Budget on 30 October it will meet with the approval of the UK’s business groups. Recent Budget submissions from the Confederation of British Industry (CBI) and others have focussed heavily on the need for economic growth. Here we look at how the groups think the Chancellor should achieve this priority.

Pivotal moment for new government 

The Autumn Budget will be a pivotal moment for the new Labour government as it aims for sustainable economic growth, says the CBI.

In its Budget submission, the business group says the task ahead is not without its challenges given the current economic and fiscal constraints.

The CBI says the key to delivering growth will be unlocking the levers to investment that let business move forward with confidence and certainty. 

At the Budget, the CBI wants to see the Chancellor take the following actions: 

• Boost productivity and investment via a more flexible Apprenticeship Levy as a first step towards the Growth and Skills Levy. 

• Expand the Made Smarter Programme enabling digital adoption to support a skilled, reliable workforce. 

• Build confidence in the transition to net zero by utilising tax incentives to drive investment into high-growth green technologies. 

• Bolster business certainty with a Business Tax Roadmap alongside long-term business rates reform. 

Walking a fine line

‘The Budget can provide a tone setting moment in the government’s growth mission that can demonstrate to markets, investors, and businesses that the UK has a credible plan for boosting its growth trajectory,’ says Rain Newton-Smith, CBI Chief Executive.

‘We recognise the Chancellor is walking a fine line with limited fiscal headroom. While we cannot risk the economic stability that is the bedrock of growth, we must be ambitious in our vision with government laying the foundations for a prosperous future.’ 

Tackle the barriers

The Federation of Small Businesses (FSB) says Ms Reeves must tackle the barriers to growth in the Autumn Budget.

The FSB is calling on the Chancellor to deliver a decisively pro-small business Budget, saying SMEs are ‘sick of stagnation’.

The business group wants measures to ease employment costs, the removal of barriers to access finance for investment, and the lifting of more small firms out of business rates.

It also wants to see an increase in the Employment Allowance so it automatically rises in line with the National Living Wage (NLW) and the reintroduction of a Statutory Sick Pay small employer rebate.

The Chancellor should also take action to give small businesses confidence to invest by increasing protection for those who put their houses on the line to grow their business, by stopping the unscrupulous blanket use of personal guarantees on loans, the FSB adds.

Huge personal risks

‘For small businesses, the barriers to investment are very personal. To help small businesses invest, employ and grow, we are asking the Chancellor to tackle the barriers that dissuade small businesses from growth,’ says Tina McKenzie, Policy Chair at the FSB.

‘Whether that’s the huge personal risks entrepreneurs take – often putting their house on the line – to secure finance; committing tens of thousands of pounds to give someone a job; or signing the contract for new premises knowing that business rates bills will land immediately. It’s by making these decisions easier for small businesses that Rachel Reeves can help small firms generate the growth we need.’

Roadmap for business

In its Autumn Budget submission, trade association UK Finance has focused on helping to deliver economic growth; clean energy and the transition to net-zero; and tackling fraud to keep people safe.

UK Finance has called for the roadmap for business taxation to include a specific plan for banks; the creation of a new, cross-government taskforce to tackle financial abuse; and the maintenance of the threshold at which first-time buyers pay Stamp Duty.

It also urged the government to make technology, social media and telecoms companies contribute to the cost of tackling economic crime.

In regard to net-zero, UK Finance called for investment roadmaps for key sectors of the economy to be published and a Stamp Duty rebate scheme to be introduced to ‘incentivise homeowners to upgrade the energy efficiency of their homes’.

Important opportunity

David Postings, Chief Executive of UK Finance, says: ‘The upcoming Budget is an important opportunity for the government to set out a clear plan for the UK. In our submission, we have called on the government to not only introduce measures to bolster growth, but also a range of ideas to help support households and businesses up and down the country.’