Key facts
- UK businesses face mounting costs from domestic policies, impacting investment and recruitment.
- The British Chambers of Commerce (BCC) states that government policies have increased costs for mid-sized businesses by over 75% in a decade.
- Shevaun Haviland, Director General of the BCC, is urging the government to cut business costs.
- AI adoption is seen as a potential growth area, with many businesses planning to increase investment.
- The upcoming autumn budget is considered a pivotal moment for business policy.
UK businesses are facing escalating costs driven by domestic policies, which is hindering investment and recruitment. The British Chambers of Commerce (BCC) warns that a decade of policy decisions, including increases to the living wage, pension auto-enrolment, and employment taxes, has led to a significant rise in operational expenses for businesses.
Shevaun Haviland, Director General of the BCC, has called on the government to reduce these costs, stating that businesses are questioning the reliance on building resilience alone. She emphasized that the upcoming autumn budget is a crucial opportunity for the government to support businesses and deliver growth.
Calculations by the BCC suggest that costs for mid-sized businesses have risen by over 75 per cent in a decade due to these policies. This cumulative cost burden diverts funds that could otherwise be used for investment in new machinery, technology, or expansion.
Recent surveys indicate a decline in business investment, with only 17% of firms increasing investment in the past three months, the lowest level since the pandemic. However, there is optimism regarding Artificial Intelligence (AI), with a significant portion of businesses reporting that AI has created new jobs and planning to increase investment in AI technologies.
The jobs market remains challenging, with companies struggling to hire due to rising payroll taxes, living wage increases, and higher energy costs. An example cited is a business that significantly reduced its apprentice intake due to these pressures.