The head of the British Chambers of Commerce has told the government that resilience alone will not drive growth, launching what amounts to a two-month push to shape the BCC Autumn Budget agenda before the Chancellor delivers his statement. Shevaun Haviland, writing for City AM, argued that business owners are already asking ‘whether it was all worth it’ and called on policymakers to begin removing layers from the cost stack rather than adding to them.
‘We need policymakers to stop adding to the cost stack and start taking layers away,’ Haviland wrote. ‘October’s Budget will be a pivotal moment and our message is simple: back business, cut costs [and] deliver growth.’
The scale of the cost burden facing UK businesses
The BCC, which represents tens of thousands of firms across the country, has calculated that government policies covering the living wage, pension auto-enrolment and employment taxes have pushed costs for mid-sized businesses up by more than 75 per cent over a decade. The organisation is now calling on the Chancellor to cut what it describes as policy-driven costs totalling £827,000 per business, a figure the BCC has put at the centre of its pre-Budget demands.
The argument is not confined to the BCC. Evidence submitted to a UK Parliament committee inquiry shows the scale of the damage attributed to the last Autumn Budget across several sectors. The British Retail Consortium estimated that Budget measures added £7 billion to the cumulative cost of policy and regulation bearing down on UK retail. UKHospitality reported that the same Budget caused 69,000 job losses in hospitality, a rate three times higher than across the wider economy. Even in smaller sectors, the National Hair and Beauty Federation calculated that its members faced an average additional cost burden of £25,000 per business annually as a direct result of that Budget.
Taken together, those figures give the BCC’s lobbying effort a concrete data backdrop as it enters what Haviland has framed as a critical period for the relationship between government and business.
BCC Autumn Budget pressure builds alongside AI debate
The lobbying push coincides with broader anxiety in the business community about the direction of the public finances. The consultancy Capital Economics has estimated that the government could raise around £25 billion in additional revenue later this year. Speculation about bank taxes and changes to capital reliefs has unsettled firm owners, even as a separate strand of optimism has opened up around artificial intelligence.
A survey by Lloyds Bank found that more than half of businesses said AI had created new jobs. Of around 58 per cent of businesses telling the bank they planned to increase AI investment to upskill their workforce, about 42 per cent said they would spend between £25,000 and £125,000 this year, while a further 26 per cent of that group indicated budgets of between £100,000 and £250,000.
A separate report from the Confederation of British Industry (CBI) and Oliver Wyman concluded that firms wanted AI made a ‘national workforce priority’. CBI boss Rain Newton-Smith said the pace of adoption would partly determine the UK economy’s future. ‘Britain now needs to treat AI adoption as a national economic priority,’ she said. ‘Government and business should set a shared ambition to make the UK the best place in the world to adopt AI responsibly, and then relentlessly focus on delivery.’
Jobs market strains and the apprenticeship effect
While the technology debate runs in the background, the immediate pressure on hiring remains acute. Payroll taxes, living wage increases and higher energy costs have made taking on staff harder for companies across the economy. Haviland put a human face on the data during a BCC visit to Lancashire last month, where she met a business that had taken on 25 apprentices the previous year. ‘This year they are taking on just one,’ she wrote.
The Chancellor faces a tight set of demands from multiple directions: easing cost of living pressures on households, implementing devolution reforms, and meeting the government’s defence spending commitment of three per cent of GDP by 2030. The spending pledges made by Andy Burnham have added to concern among industry leaders and investors that further tax rises may follow.
The BCC’s £827,000 cost-reduction ask gives the Chancellor a specific and sourced number to contend with when the Budget arrives.
