Shevaun Haviland: Politicians must back the makers and risk-takers who can drive growth

Shevaun Haviland CBE is Director General of the British Chambers of Commerce. Shevaun writes here as a guest contributor and is not a Conservative Party member.

Growth comes from the people who start firms, take on staff, and put their own money on the line. The government’s job should be to make those decisions easier.

But over the past decade, successive Governments have chosen instead to pile policy costs on business. Their combined weight, along with a tougher international environment, is now holding firms and growth back.

British Chambers of Commerce research shows that the policy-driven costs facing the average small business have risen by more than 70 per cent in a decade, with much of the increase levied since the last General Election.

On a recent visit to Lincolnshire, two businesses I spoke to laid bare the damage being done by the rising cost of doing business. An agricultural firm has been hit with an extra £200,000 a year in energy bills because of domestic energy levies and the Iran crisis. A hospitality firm felt they had pushed prices to the limit of what customers will pay to cover rising costs, and the owner was now considering closing his restaurant altogether. Unfortunately, I come across similar cases right across the country.

Every pound a business spends absorbing higher costs is a pound it doesn’t spend on a new machine, an apprentice, or an export order. Just 17% of firms increased investment last quarter. You cannot grow an economy by making it ever more expensive to do business.

Ahead of the budget we are urging all parliamentarians to press the case for lower costs on business and the Opposition has an important role to play.

The British Chambers of Commerce has proposed three priorities for the budget:

, we need to stop piling costs on business and incentivise investment, not destroy it.

Firms around the country tell me that they have decided against extending their premises, or even putting solar panels on the roof, because their business rates bill would go up. The Conservative Party has pledged to abolish business rates for high street shops and pubs, but we need to go further. We should offer relief that reaches the factory and the office as well as the high street. On energy, it’s even simpler: costs are too high. We should remove the policy costs on businesses, as has already been done for households, giving them real room to invest.

, we have to get more young people into work.

One in six young people in the labour market is currently unemployed. That’s a national tragedy. A first job is the country’s best welfare policy. Policy needs to incentivise, not disincentivise employers from hiring young people, especially with the headwinds of the Employment Rights Act. We’re calling for the extension of the zero-rate on National Insurance for under-21s to 24-year-olds and under. That will support firms willing to take a chance on young people, right when they need it.

, we need to support Britain’s exporters.

As an island nation, Britain has always made its living through trade. But many SMEs don’t know how to navigate and capitalise on the many free trade agreements the UK has signed since we left the European Union. Yet, local, face-to-face advice for exporters has been cut to the bone. Where it exists, the results are strong: in the West Midlands, three Chambers of Commerce and the Combined Authority supported nearly 300 small businesses to trade abroad with just £5,000 worth of support for each SME – paid back in economic benefit many times over. Restoring consistent, locally delivered support across England would see the benefits of our trade deals finally be realised.

But above all, what firms want most is to be able to plan. A roadmap for business tax, starting with a commitment to no new taxes on business, would do more for confidence than almost any single measure.

The path to stronger growth is clear. Policy makers need to choose it. We need to cut costs, incentivise investment, get young people back into work, increase exports and restore business confidence. Back business, cut our costs and we will deliver growth

Original source Shevaun Haviland: Politicians must back the makers and risk-takers who can drive growth

Back to home