Chancellor must outline Sustainable Growth Plan

February 20, 2024

The British Chambers of Commerce is calling for the Chancellor to use next month’s Budget to work in partnership with business to develop a sustainable growth plan. 

Among the recommendations in the BCC’s Budget submission are:

• Government to match industry-led funding of £3m for planning qualifications to help plug the lack of local resource.
• Ministers should commit to fund business led Local Skills Improvement Plans (LSIPs) beyond the current 2025 cut off point to at least 2028.
• The VAT registration review should be restarted with a view to removing the existing cliff edge. 
• Government should reform business rates to make it a tax that incentives growth.
• The Chancellor should introduce a new internationally competitive tax-free shopping scheme. 

 

Findings from the BCC Insights Unit’s ‘first major business survey of 2024 highlights the urgency for action at the Budget.

43% of responding firms with a turnover of less than £85,000 say they are concerned about growing revenue beyond this specifically because of the requirement to pay VAT.

Meanwhile, over a quarter of companies (26%) say they have changed plans to upgrade or open premises as a direct result of business rates.

38% of responding businesses say they are now paying more following the 2023 rates revaluation.

Current business conditions are among the hardest seen in generations as multiple economic crises converge. The BCC’s Quarterly Economic Survey for Q4 2023 showed that while business confidence has improved slightly, most firms continue to report no improvement to sales, cash flow or investment.

 

Shevaun Haviland, Director General of the British Chambers of Commerce said:

“As businesses continue to chart a course through choppy economic waters, they want to work in partnership with

Government to get the UK economy growing again.

“The Chancellor has shown he is in listening mode. At the Autumn Statement we were pleased to see full expensing made permanent and business rate relief. The Budget is an opportunity to build on that good work and further accelerate help for business.

“Our recommendations are solution focused. We’re actively working with industry to develop a UK-wide, private sector funded programme to train more planners to work in local planning authorities, to boost their planning skills and capacity. Alongside our fund, we’re calling for the Chancellor to provide more funding to LPA’s in greatest need of skills. That will support the authorities, to employ the additional graduates and upskilled professionals we are training. Unlocking our planning system is crucial to economic growth.

“Our latest research shows that many SMEs are struggling because of business rates, and are limiting their expansion plans because of the VAT threshold.  The Chancellor should use his statement next month to announce plans to make rates fairer and restart the VAT registration review.

“Attracting, retaining, and developing people with the right skills is crucial for business. But far too many employers are struggling to do that. Business-led Local Skills Improvement  Plans (LSIPs) are key to resolving skills shortages. They are  already making a huge difference in communities across England. LSIPs need long-term commitment and funding, to ensure people can access the training they need for great jobs.

“A new internationally competitive tax-free shopping scheme would help turbocharge the UK’s retail and hospitality sectors, bringing benefit to all corners of the UK through economic growth and tax revenue.  The Government must signal that the UK is open for business.

“With the clock ticking before the General Election, next month’s Budget must outline the sustainable growth plan businesses are crying out for.”