UK businesses have experienced a decade of increasing cost pressures stemming from domestic policy decisions, which is reportedly damaging business growth. The British Chambers of Commerce (BCC) has launched a new Cost Stack Calculator to highlight these cumulative impacts.
Modelling by the BCC indicates that a typical SME, employing 50 people with a turnover of £5m, has seen costs from government policies increase by more than 70% over the past 10 years. These costs include increases in minimum wage, employer National Insurance, business rates, and various levies and tax changes.
The cumulative effect of these policies is impacting business investment and recruitment. A recent survey of 4,700 businesses across the UK revealed that only 17% of firms increased investment in the last three months, marking the lowest level since the pandemic.
Shevaun Haviland, Director General of the British Chambers of Commerce, stated that every pound spent absorbing higher costs is a pound that cannot be invested in new machinery, hiring, technology, or expanding into new markets. The BCC is calling for policymakers to reduce the cost burden on businesses, with October's budget identified as a pivotal moment.