Businesses set out demands for new PM

Business leaders welcomed the election victory of Liz Truss as the UK's next Prime Minister, but warned that swift action was needed to tackle growing economic turmoil.

Number 10 Downing Street - the official office and residence of the British Prime Minister in London, UK

David Sapsted

5 September 2022

Confronted by rocketing energy costs, mainly as a result of the Russian invasion of Ukraine, surging inflation and a global economic downturn, business groups called for immediate support to enable firms to survive and, eventually, to thrive.

Related reading from Relocate Global

'Meet the economic challenges head on'

The British Chambers of Commerce (BCC) used Ms Truss's victory to repeat its call for the new Prime Minister to adopt a five-point plan to reinvigorate the UK economy, including a liberalisation of the immigration Shortage Occupation List, which would allow companies to hire more of the overseas talent they need.Meanwhile, the finance industry said the new Government should relax short-term business mobility rules to enable foreign business leaders to conduct more activities when they visited the UK.Tony Danker, Director-General of the Confederation of British Industry (CBI), pointed out that "this is an extraordinarily difficult time to be leading the country" and said Ms Truss had businesses’ full support in meeting shared challenges "head on".He added: “Most immediately, support for struggling households and firms in jeopardy is top of the in-tray. This may not be the pandemic, but the exceptional circumstances we now face mean Government must play a central role in supporting our economy.“And if we’re serious about getting the UK growing again, ensuring any slowdown is short and shallow, we need a serious plan for growth. It needs to be bold, unconventional and rooted in the very real opportunities that still exist for the UK to thrive.”

Tax cuts on the table?

Aside from reforming the Shortage Occupation List, the BCC also wants the new PM to abandon an increase in National Insurance contributions; strengthen regulation of the energy market for businesses; temporarily cut VAT to five per cent to reduce energy costs for businesses; and introduce an Emergency Energy Grant for SMEs.Sarah Howard, who chairs the BCC, said Ms Truss must take immediate steps to support the economy. "The last few months have been difficult for everyone, time is running out and urgent action is needed to deal with the costs’ crisis," she said.“We believe the country has already entered a recession and that inflation will hit at least 14 per cent in the months ahead.“Like households, firms have been telling us of unsustainable rises in their energy bills and how difficult it is to find new fixed term contracts to buffer against further price hikes.“Unless the new prime minister addresses these problems head-on, then the economy will drift further into dangerous waters and the outlook for both businesses and consumers will be bleak indeed."

Addressing the energy crisis

The Federation of Small Businesses also demanded action on the energy crisis, with Robert Downes, the organisation's Development Manager in Greater Manchester, saying firms "do not have the luxury to wait until the winter" for action to be taken."Inaction from our new Prime Minister could spell the end for many businesses," he warned. “There can be no dithering or delay on something as critical as this – solutions for which should ideally have already been in place."Price hikes of three, four, or five-times are not sustainable, and unlike domestic consumers, small firms are not protected by a price cap, and so far they have not been offered direct financial support to match that being given to households.”

The City steps in to offer support

For its part, the financial services trade body, TheCityUK, has issued its manifesto it wants the new Prime Minister to adopt. It lists eight areas where the finance industry can work with Ms Truss "to deliver more skilled jobs across the country, increase services exports and ultimately generate higher tax receipts by boosting the financial and related professional services industry".The manifesto includes the speedy delivery of the Financial Services and Markets Bill to free up capital for widespread UK infrastructure investment, and reforming the tax system to create incentives that would accelerate financing the transition to net zero, as well as liberalising short-term business mobility rules for overseas business personnel.Miles Celic, CEO of TheCityUK, said he hoped the new PM would help the sector "regain our role as the world’s foremost international centre of finance".He added: “By working closely with our members, the next Prime Minister can help boost investment and drive the long-needed economic growth that is the only way for the UK to meet its potential.”