Leading UK Business Groups Urge Jeremy Hunt to Boost Investment and Address Economic Challenges
Leading business groups in the UK are calling on Chancellor of the Exchequer, Jeremy Hunt, to implement a range of measures aimed at unlocking investment and addressing key economic challenges. The groups, including the Confederation of British Industry, British Chambers of Commerce, MakeUK, Institute of Directors, and the Federation of Small Businesses, have outlined their demands ahead of Hunt’s Autumn Statement on November 22.
While Hunt has downplayed expectations of significant giveaways in his statement, citing the need to bear down on inflation, industry leaders argue that the Chancellor can still take steps to boost the business environment. Shevaun Haviland, director-general of the British Chambers of Commerce, stated that businesses have billions of pounds in private investment waiting to be invested in the UK economy.
The economic outlook is currently bleak, with the Bank of England recently downgrading its growth forecast for 2024 to zero, with a 50% chance of a recession next year. Hunt’s fiscal headroom was at its lowest level ever during his last budget in March, but recent high inflation and wage growth have increased tax revenue, providing more room for maneuver. However, the Resolution Foundation has warned against a “fiscal illusion,” cautioning the Chancellor that inflation alone cannot boost tax income without increasing spending.
Hunt faces a tricky balancing act, with Conservative Members of Parliament calling for tax cuts and the governing party currently trailing Labour in the polls. The business groups are advocating for tax cuts that would lift the economy, rather than measures that would appeal more to voters. Their key requests include making permanent the “full expensing” policy introduced in March, which provides firms with 100% tax relief on capital spending. The groups also want Hunt to address skills shortages, fast-track power grid updates, extend discounts on business rates for retail and hospitality firms, and re-instate tax-free shopping for international visitors.
The Chancellor’s decisions in his Autumn Statement will have far-reaching implications for the UK economy. He must carefully consider the demands of business leaders, the challenges posed by inflation, and the need to secure public support ahead of a general election expected next year.
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