The British Chambers of Commerce (BCC) has made boosting North Sea investment its number one ask of Rachel Reeves ahead of the Budget next month.
The national business organisation has asked the Chancellor to use her first Budget to "seize the moment" to boost business and grow the UK economy.
BCC President Martha Lane Fox was in Aberdeen yesterday to engage with the local business community and take part in a live interview.
The BCC’s budget submission focuses on policy recommendations to encourage investment, strengthen the workforce and develop our local economies.
The top five recommendations are:
- Create a competitive investment environment by expanding full expensing to leased assets and promoting North Sea investment.
- Support a healthier workforce by reducing the employer and employee tax on workplace health services.
- Engage employers in skills planning by extending investment in Local Skills Improvement Plans and addressing gaps in local training provision.
- Reform business rates, with the aim of lowering the multiplier to 45p by the end of this Parliament.
- Invest in infrastructure by delivering previously planned transport projects, improving rail capacity, and updating planning rules to increase employment land supply.
With inflation now close to target, and interest rates beginning to fall, the first half of 2024 has seen business confidence rise.
The BCC has upgraded its economic growth forecast for 2024 three times this year - from a low of 0.4% to an expectation of 1.1%. However economic growth is currently forecast to remain flat in 2025 and 2026.
And fears over increases in taxation on firms, and warnings of tough choices in the budget, have left business leaders wary.
While interest rates are starting to come down, the long-lasting impact of the cost-of-living crisis means people are also still reluctant to spend and the UK’s trade performance remains weak.
Shevaun Haviland, Director General of the British Chambers of Commerce, said: “The first budget of a new Government is always a huge moment to shape the expectations of business and the public for the years ahead.
“So, the Chancellor is right to champion the critical importance of economic growth and investment. Businesses are keen to get more detail on how the Government plans to do this, so we can all work to make it happen.
“On trade and investment, the level of funding directed towards growth and expansion by UK firms needs to be unleashed. They need help to realise their growth potential and attract inflows of overseas cash for big ticket projects.
“Action on full expensing, North Sea capital allowances, and business rates could all help free up money to invest in innovation across our country.
“This needs to be supported by public spending on transport, digital infrastructure and the power grid. This is crucial for a 21st Century economy to grow and sends a clear signal to investors on the Government’s intent.
“Finally, the people problem in the UK economy must be fixed. Firms are still struggling to find the staff with the skills they need to grow – they either don’t have the training or aren’t looking for jobs at all.
“Steps are needed to help people with health issues to stay in the workplace, and to provide everyone with the skills they need to either get jobs or progress up the ladder.
“All of this must be wrapped up in a framework of industrial and trade strategies that set out a clear pathway for firms in the UK to expand and increase overseas sales.”