The head of Britain’s largest business group has warned that focusing on economic resilience alone won’t drive growth, urging the government to reduce costs for companies ahead of the Autumn Budget.
Shevaun Haviland, director general of the British Chambers of Commerce (BCC), said business owners were questioning whether the government’s emphasis on resilience was “all worth it.” In an exclusive column, she called on policymakers to “stop adding to the cost stack and start taking layers away.”
Businesses face rising costs amid policy pressures
The BCC, which represents tens of thousands of firms across the UK, has highlighted what it calls a “cost of business crisis.” Its calculations show that government policies—including increases to the living wage, pension auto-enrolment, and employment taxes—have pushed costs for mid-sized businesses up by more than 75% over the past decade.
Haviland cited a recent visit to Lancashire, where she met a company that had reduced its apprentice intake from 25 last year to just one this year. “From my travels across the UK, I know this isn’t a unique story,” she wrote.
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With the new Labour government preparing for its first major fiscal statement in October, businesses are stepping up lobbying efforts. Chancellor John Healey faces competing demands: easing cost-of-living pressures, advancing devolution reforms, and increasing defense spending to 3% of GDP by 2030.
Some industry leaders and investors have raised concerns about potential tax hikes to fund these commitments. Consultancy Capital Economics estimated that the government could seek an additional £25 billion in revenue later this year, with speculation centering on bank taxes and capital reliefs.
AI emerges as a rare bright spot
Amid the cost pressures, artificial intelligence has become a source of optimism for many firms. A survey by Lloyds Bank found that more than half of businesses reported AI had created new jobs. About 58% said they would increase investment in AI to upskill their workforce, with 42% planning to spend between £25,000 and £125,000 this year. Another 26% expected to invest £100,000 to £250,000.
The Confederation of British Industry (CBI) has also urged the government to make AI a “national workforce priority.” CBI chief executive Rain Newton-Smith said the UK’s economic future would depend on “how quickly we can put AI to work at scale.” She called for a shared ambition between government and business to make the UK the best place in the world for responsible AI adoption.
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For now, the jobs market remains difficult for both employers and workers. Rising payroll taxes, higher energy costs, and living wage increases have made hiring more expensive, while companies struggle to find and retain staff.
Haviland’s message to the government was clear: “October’s Budget will be a key moment, and our message is simple—back business, cut costs, and deliver growth.”
The question is whether the government will listen—or if resilience, rather than expansion, will remain the priority.