Put Business first to power Britain’s economic recovery

Britain is preparing for a new chapter in its political leadership. Regardless of who ultimately becomes the next Prime Minister, one priority should rise above partisan politics: putting business at the centre of the UK’s economic strategy.

Economic growth does not happen by government policy alone. It is created by business leaders taking risks, be that investing in innovation, creating jobs, or expanding into new markets. If the next Prime Minister wants to raise living standards, strengthen public finances, and restore confidence in the UK economy, supporting businesses must be at the heart of the agenda.

Businesses are the engine of the economy

Businesses that invest for the future, deliver innovation and increased employment opportunities, which ultimately result in a rise in tax revenues for the Government. From family-run firms on local high streets to multinational corporations operating across global markets, the private sector remains the driving force behind economic prosperity.

When businesses grow, they hire more staff, increase wages, invest in skills, purchase goods and services from suppliers, and contribute more to the Treasury. Economic growth becomes self-reinforcing.  Yet many businesses feel they have spent recent years navigating an increasingly difficult trading environment.

The challenges facing UK Businesses

The next Prime Minister will inherit a business community facing significant pressures.

Rising costs

Inflation may have eased from its peak, but many firms continue to struggle with elevated operating costs. Energy bills remain a concern, borrowing costs are higher than many businesses became accustomed to over the previous decade, and rents, rates, employee and supplier costs continue to squeeze margins.

For SMEs in particular, every increase in overheads has a direct impact on profitability and investment decisions.

Labour and skills shortages

Across numerous sectors—including manufacturing, logistics, healthcare, construction, hospitality, and technology—employers report difficulties recruiting skilled workers.  The UK faces a persistent skills gap that threatens productivity and growth. Businesses need access to a workforce equipped for a rapidly changing economy, particularly as AI and digital technologies reshape industries.

Tax burdens

While businesses understand the need for public services and fiscal responsibility, many argue that the tax system has become increasingly complex.  Frequent policy changes, uncertainty around allowances, and administrative burdens create additional costs and discourage long-term investment. Stability and predictability are often valued as highly as tax reductions themselves.

Access to Finance

Many growing businesses struggle to secure affordable financing. Higher interest rates have made borrowing more expensive, while lenders have become more cautious.  Start-ups and scale-ups—often the businesses that drive innovation and future job creation—need better access to funding if the UK is to remain competitive internationally.

Regulatory Pressures

Businesses often support sensible regulation, particularly where it protects consumers, employees, and the increasingly the environment. However, excessive bureaucracy can slow growth, increase costs, and divert resources away from productive activity.  The challenge for government is to maintain high standards while ensuring regulation remains proportionate and growth friendly.

Productivity Challenges

The UK’s productivity performance has lagged behind many comparable economies for many years. Weak productivity growth limits wage growth, business competitiveness, and overall economic performance.  Addressing this issue requires investment in infrastructure, technology, innovation, and employee development.

Where the next Prime Minister should focus

• Stabilise the policy environment – When businesses invest, they are investing for the long term. Constant policy shifts undermine confidence and make planning difficult. Any incoming Prime Minister should commit to a clear, consistent economic strategy that provides certainty for investors and employers.

• Encourage Investment – Investment incentives should reward businesses that want to expand operations, invest in technology, improve productivity, and create jobs. The UK needs to improve its reputation as act to be one of the most attractive destinations for business investment.

• Support SME’s – These firms account for the overwhelming majority of UK businesses and employ millions of people. Policies should make it easier for SMEs to adopt new technologies, recruit staff, access finance, and compete effectively.

• Invest in skills – A strong economy requires a modern workforce. The Government, educational institutions, and employers must work together to strengthen apprenticeships, vocational training, and lifelong learning programmes that meet and keep up with the needs of today’s labour market.

• Deliver better infrastructure – Transport networks, digital connectivity, energy infrastructure, and housing all influence economic growth. Businesses can’t operate efficiently if employees struggle to commute, goods cannot move effectively, or IT  infrastructure falls behind our international competitors.

• Champion Innovation – The UK has world-class strengths in technology, life sciences, financial services, advanced manufacturing, and creative industries. The next Prime Minister should build on these advantages by supporting research, encouraging innovation, and creating conditions where new businesses can flourish.

Economic growth benefits everyone

Economic growth should not be viewed solely as a business benefit. Strong businesses create opportunities for employees, communities, and families across the UK.  A growing economy generates the tax revenues needed to fund public services. It creates jobs, supports wage growth, attracts investment, and improves living standards.

The UK’s economic future will not be secured through government spending alone. It will be built by the millions of businesses and their leaders who take risks every day to create value and opportunity.

As the country prepares for a new Prime Minister, the message from the business community is straightforward: make Britain a better place to start, grow, and invest in a business.

Put business first, and the economy will follow.

Read more

The true cost of waiting – why delaying funding decisions can restrict business growth