The British Chambers of Commerce (BCC) has said next month’s Budget will be the “critical test” for Andy Burnham’s government, after the Prime Minister’s first Labour Party conference speech as leader today gave business what it called “encouraging signals” on costs.
Shevaun Haviland, director general of the BCC, described it as “a powerful speech in which the Prime Minister took a long-term view and signalled a willingness to make tough choices”.
“He gave business some encouraging signals that his government will avoid adding to the cost of doing business,” she said. “But next month’s Budget will now be the critical test, it must cut those costs, unlock growth and let the entire country benefit.”
The Budget, the first to be delivered by chancellor John Healey, is due on 28 October. The BCC responded to Healey’s own conference speech yesterday, and the CBI has separately urged Healey to cut business costs ahead of the statement.
Public control and energy
Burnham used the speech in Liverpool to set out plans for Great British Grid, a publicly owned company. Labour said the body would invest in and compete for transmission connection projects alongside the private companies that own the grid, with funding to come from within the existing budget of GB Energy.
On public control, Haviland said: “The business community will be concerned about the potential for greater public control. State control should not be the default answer to poor performance in utilities and critical infrastructure.”
“Business needs certainty, targeted regulation and a clear public value test, so investment keeps flowing and customers see better outcomes.”
She said the Prime Minister had “rightly diagnosed that faster connections to the electricity grid and driving down energy costs are key drivers for economic growth”, but added: “But it’s crucial that more detail on the Great British Grid and how it will operate are quickly outlined.”
“We welcome his pledge to make pragmatic choices on North Sea transition,” she said.
Haviland said consumers and the very smallest businesses would benefit from the scrapping of VAT on electricity from this week, but that other firms “will be left waiting for benefits of market reform before their bills are cut”.
Welfare and the triple lock
On welfare, Haviland said: “It was encouraging to hear the Prime Minister reiterate his commitment to bringing down the welfare bill. With taxes maxed out and borrowing costs at a premium, government spending must be the key part of the fiscal equation to change.”
She said the BCC had called for “an honest debate about big ticket measures such as the triple lock, and this is something businesses will welcome today”.
In its Budget submission to the chancellor, the BCC proposed cutting employer national insurance contributions for all under-25s, funded in part by replacing the pensions triple lock.
EU, AI and devolution
On trade, Haviland said: “The Prime Minister’s pragmatic tone today on rebuilding our relationship with the EU is welcome.”
“Businesses want a strategic long term plan to make trade with our largest export market easier, cheaper and faster, so they can focus on growth,” she said. According to Haviland, Burnham promised that the UK-EU summit would take place by the end of the year.
On artificial intelligence, she said: “Putting AI centre stage is key to turbocharging economic growth. We have great innovation and a focus on leading global regulation. But we need a bolder strategy on adoption that helps all business stay ahead of the technological journey.”
On devolution, Haviland said the BCC wanted “to see more economic levers given to communities across the UK” as the Prime Minister looks to drive growth by moving power closer to people and places.
“Working effectively with the Chamber network will help the government deliver the growth we all want to see,” she said.
In a report on devolution published on 20 September, the BCC called on the government to complete the devolution map by the end of the 2027-28 financial year, and said the chancellor should announce those plans at the Budget.
