Spring Budget Must Ease The Squeeze

The BCC is calling on the Chancellor to use his Spring Budget to relieve cost and recruitment pressures on business. It follows the release of new research which reveals how low business confidence has fallen at the start of 2023.

Among the findings from the survey, of more than 1,000 firms, are:

• Two thirds of businesses (65%) plan to raise prices due to cost pressures 

• Almost half (47%) say paying energy bills will be difficult when the current business support package ends 

• More than half (52%) are consistently experiencing difficulties recruiting staff 

• Concerns around regulation and taxation are regularly troubling a third of firms (30%)

The survey backs up findings from the BCC’s most recent Quarterly Economic Survey of more than 5,000 companies which found business confidence remains at Covid-crisis levels.

It found that only one in three (34%) businesses believed their profits will increase over the coming year, and more (36%) expected a decline.   While a quarter of firms reported a decrease in sales in the last quarter of 2022, with hospitality firms the least likely to report improvements.

Commenting on the findings, Shevaun Haviland, Director General of the BCC, said:

“This snapshot of the state of play for business at the start of 2023 sets out exactly why the Chancellor must act in his budget to fuel investment in the UK.

“We know we have a tough year ahead. With costs piling up on their doorsteps and so much uncertainty on Government policies, there is currently little incentive for firms to risk either their dwindling cash reserves or fresh loans on new projects.

“Firms know that the UK’s finances are tight, but the Chancellor needs to show more faith in the ability and talent of our businesses.

“If they can see the Government is prepared to invest in them, by taking action on childcare, energy costs, green funding and Solvency II, then the future could soon look a lot rosier and greener.”

The BCC has set out four key areas where the Chancellor must act in the budget if businesses are to make headway in bolstering the economy in 2023.

These are:

• Unlocking talent and easing pressure in the labour market by making childcare more affordable for cash-strapped parents and guardians    
• Boosting the UK’s start-ups by further reforming the business rates system to remove the upfront financial squeeze they face    
• Setting a framework for Solvency II investment that helps direct funds to SMEs where they can have the most impact, leveraging the opportunities of green innovation  
• Funding to help businesses become greener and more energy efficient  

The BCC’s four non-negotiables form part of its wider budget submission to the Treasury. It contains a list of 24 recommendations for the Chancellor that could create the conditions businesses need to power the UK’s economic recovery.