Spring Budget 2024: What are business groups lobbying for?

Firms up and down the UK will be waiting in anticipation for Jeremy Hunt and the Treasury to reveal the contents of next week’s Spring Budget.

But ahead of the Chancellor opening the famous Red Box, business lobbying groups will have been preparing the groundwork well in advance.

Key policy asks will have been made, alongside requests for sector specific support. We’ve broken down what the main business lobbying bodies are hoping to hear.

BusinessLDN

For the London-based network, who represent over 170 firms in the capital, their focus is on how the Treasury can back business to grow the economy.

Key asks are themed around enterprise, education, employment and ‘everywhere’ and range from reinstating VAT-free shopping for international visitors, reforming the Apprenticeship Levy, and improving access to childcare; to supporting growth via the migration system, funding Transport for London (TfL), and delivering more affordable housing. 

Hopes of a ‘tourist tax’ U-turn, however, are looking dicey, after the financial secretary to the Treasury warned of the complexities of such a move, according to the Times.

Chief executive John Dickie said: “Having laid the foundations for growth in the Autumn Statement, this Spring Budget is an opportunity to build on those measures to further encourage investment, productivity and growth.”

He said BusinessLDN’s recommendations focus on “low-cost measures” offering a “near-term boost to growth” and “targeted public spending” to “leverage private investment”.

Federation of Small Businesses

The Federation of Small Businesses (FSB), which supports and champions SMEs, has also set out a wishlist ahead of the Spring Budget.

They are keen to see the employment allowance – which lets employers reduce their National Insurance liability – go from £5,000 to £6,500; and the VAT threshold rise from £85,000 to £100,000, after some 38 per cent of firms described it as a “barrier to growth”.

Other suggestions include extending the business energy advice service pilot to a national scheme; restoring tax-free shopping to boost retail and hospitality; and increasing the recovery loan scheme beyond July 2024.

National chairman Martin McTague, said: “Next week, the Chancellor must show the country he can take practical and credible steps to improve the environment for everyone who runs, works in, or uses small firms across the UK.

“We know that in times of recession, the more money small firms have to work with, the more chance the economy has of not only recovering but recovering quickly.” 

British Chambers of Commerce

The British Chambers of Commerce (BCC), which boasts 53 accredited UK chambers in its network, has called on Hunt to outline a sustainable plan for economic growth.

Its specific recommendations include: £3m in government funding to train planning officials; extending the Local Skills Improvement Plans (LSIPs) to at least 2028; restarting the review of VAT registration; reforming business rates; and founding a new tax-free shopping scheme.

BCC director-general Shevaun Haviland said: “As businesses continue to chart a course through choppy economic waters, they want to work in partnership with government to get the UK economy growing again.  

“The Chancellor has shown he is in listening mode… our recommendations are solution focused. With the clock ticking before the general election, next month’s Budget must outline the sustainable growth plan businesses are crying out for.” 

Institute of Directors

The Institute of Directors (IoD), which represents around 20,000 company directors, bosses and entrepreneurs, is also focused on the UK’s “rate of sustainable economic growth”.

They want to see tax credits offered to firms training workers to fill skill shortages; more incentives for SMEs to make the switch to net zero; greater pressure on those who are slow to pay invoices; and a volume-based and proportional export target.

Another focus is encouraging investment in physical and human capital through capital allowances – aka “a significant widening of the scope of the full expensing regime”.

Policy director Dr Roger Barker highlighted that “skills shortages are consistently identified as one of the main pain points our members face” and added: “Our members cite the ‘lack of clear business case’ as one of the biggest obstacles in reducing their carbon footprint.”

Confederation of British Industry

The Confederation of British Industry (CBI) titled their submission to the government: “Build momentum to avoid economy remaining on standstill until election”s.

Policy asks include: efforts to tackle labour shortages, such as expanding childcare eligibility and speeding up Home Office visa processing; extending full expensing to cover leased and rented assets; and backing high-growth industries via a competitive R&D tax credits scheme.

CBI CEO Rain Newton-Smith said: “The Chancellor needs to perform a tricky high wire balancing act of giving momentum to the economy without sacrificing hard-earned credibility. 

“Businesses are impatient for the economy to pick up steam. UKplc needs a budget that prioritises economic momentum over election giveaways, giving firms the confidence to invest and avoiding the economy remaining on standstill until election day.”