What do businesses need from the next UK Government?

The last month has seen a flurry of political activity as the race for number 10 enters the back straight and the finishing line is now in sight.  As the UK wakes up on the 5th of July and the post-election fuss settles down, UK business owners will be wondering what the newly elected Government has in store for the business sector.  Martin Bennison of Pulse Cashflow Finance outlines what he hopes the new incoming government will deliver to reignite the UK’s growth trajectory.

General Elections can be bad for the economy as many businesses press the pause button on major decisions until the ground beneath their feet settles. They don’t move to new premises, make capital investments, or recruit that expensive new hire. Business is the engine of our economies – they create jobs and wealth – and for those that have survived the challenges of recent years they want increased certainty to have the confidence to drive a growth agenda.  It’s imperative then that the elected Government puts UK business at the top of the agenda from day one.  Public spending will be squeezed and monetary policy tight over the next four years, so the Government will no doubt be looking to the private sector for growth. 

Vitally important will be the policies rolled out over the next four years and to what extent they boost confidence and enable growth.  Whoever the new Government is, they have the opportunity to change gear and prioritise policies that will support the private business sector and promote a period of growth.  How do they do that?

Increase investment not taxes

If the environment is right, businesses invest and the UK economy benefits.  To enable this, they need to access capital to make their plans come to fruition.  The relatively high interest rates have meant that firms have been reluctant to borrow to invest in their business. Interest rate cuts are now expected with a forecast of 3.5% by the end of 2025.  However, the Government need to foster a culture of investment if business is to thrive. This could come in the form of tax cuts.  The Conservatives had promised to give Businesses the most competitive tax rate of any major economy, aiming to have the lowest tax rate anywhere in the G20.  When business owners operate in a low tax environment, they put more money into investment, into jobs, into progress, into the growth we need in our country.  We need a simplified, long-term and internationally competitive tax roadmap to help encourage investment in the medium to long term.

A trade and investment strategy that builds confidence

The Government needs to commit to improving the UK’s trade relationship with the EU (and other overseas territories) and removing unnecessary barriers to trade.  Businesses need the Government to support the development of international trade – from supporting higher levels of exports and imports to encouraging inward investment.  Helping our business sector become competitive on the international stage, growing productivity and boosting employment has to be a key priority.

Ease the burden of regulation

Business needs to feel that government has a clear plan that will help them grow and not hinder them with too much bureaucracy and regulation.  We need to transform our regulatory landscape to deliver the best outcomes for business. I would like to see the Government supporting the enablement of goods distribution to international customers making it easy to trade in Europe and further afield.  In addition, we need to support the construction sector by transforming our planning system.  Decisions need to be quicker with less bureaucracy, with a UK wide planning for growth strategy.  

Deliver a Net Zero Investment Plan

Net Zero is something everyone recognises as an imperative, but it’s how we do it that causes the disputes.    The UK should encourage investment opportunities in this area so firms want to invest and grow in the UK.  Success will create jobs, provide greater energy security and efficiency and lower our energy cost whilst also increasing tax receipts.

Revamp the outdated business rates system

One of the biggest costs for businesses on our high streets be they retail or hospitality, is business rates.  Reform has been talked about for years, but no change has been forthcoming.  Our high streets need regenerating to supply jobs and to support businesses at the heart of our local communities.

Tackle the labour and skills shortage

We need UK businesses to be competitive and to do that they need to boost productivity.  The lack of skilled labour is holding the UK back.  Businesses need support to invest in skills and training.  We also need to see the supply of grants to enable businesses to train apprentices or under qualified people, to get more people back into work who don’t have the right experience or qualifications

Business can expect much government focus on growth whichever party wins – but the emphasis on how to get there is different. They are seeking a long period of stability.  We wait to see what the next government's legislative priorities will be.