What Do Businesses Want From Burnham Prior to UK Budget?

UK business leaders are pressuring Prime Minister Andy Burnham and his new government to prioritize tax cuts and reduced regulatory burdens ahead of the autumn budget. While Burnham has already cut business rates for pubs, clubs, and live music venues, other sectors, particularly retail, are demanding similar relief. Alex Baldock, CEO of Currys Plc, advocates for the abolition of business rates, arguing that lower costs would enable investment and job creation.

Several CEOs are calling for increased dialogue between the government and businesses. Thomas Woldbye of Heathrow Airport Ltd. seeks continued support for the airport's $65 billion third runway expansion. Andrea Baldo of Mulberry Group Plc is pushing for the reintroduction of VAT-free shopping for tourists, believing it would benefit luxury retail, hospitality, and the wider UK economy. Jon Hendry Pickup of Butlin’s and John Vincent of Leon Restaurants Ltd. suggest a VAT cut for hospitality and a reduction in National Insurance contributions to address job losses and ease pressure on employers.

Despite some initial relief for pubs, other business leaders, such as Tim Martin of J D Wetherspoon Plc, argue that more comprehensive measures are needed. Martin highlights the disparity in VAT between supermarkets and pubs, backing a campaign for a more equitable rate. These demands come as Burnham faces a shrinking budget and a dilemma on how to cut the cost of living while rebalancing business taxes, potentially shifting burdens to larger companies like Amazon.com Inc. The National Institute of Economic and Social Research has warned that the government's budget headroom has decreased from approximately £7 billion to £3 billion, necessitating an extra £24 billion in savings by the end of the decade to maintain existing spending commitments. This fiscal constraint puts pressure on Chancellor John Healey to find funds for tax cuts without breaching fiscal rules or resorting to further borrowing, suggesting that new commitments must be funded through taxation or savings elsewhere.