Is your business budget ready?

Understanding the new policy landscape 

As the new Labour government settles into office following the momentous result on 4 July, businesses across the UK are preparing for the changes that lie ahead. The new administration’s policy ambitions, as outlined in their pre-election manifesto, signal significant shifts in public spending, taxation, and regulatory frameworks. For businesses, this presents both challenges and opportunities. To navigate this evolving landscape and influence decisions at the next major fiscal event, it is crucial to be equipped with robust economic evidence.

The new government has committed to consolidating public finances while restoring stability, increasing investment and reforming the UK economy.  This delicate balance will shape the economic environment in which businesses operate.

Key policy areas to watch include: 

1. Public spending and taxation: The government plans to raise public spending, funded by tax increases and fiscal rule adjustments. Labour has announced its intentions to publish a new Business Tax Roadmap within its first six months in government, which will help to provide greater certainty for businesses looking to invest. In its manifesto, Labour has also signalled it would cap the main rate of corporation tax at the current level of 25% and retain permanent full expensing for capital investment
2. Planning reform: The government announced a series of planning reforms to unlock significant infrastructure and housing developments, as well as private investment in renewable energy and decarbonisation, gigafactories and innovation. This will be an important development aimed at unlocking regional growth, helping businesses accelerate their investment plans
3. Business rates and local devolution: The reform of business rates aims to shift some of the burden onto large online retailers, tackle the issue of empty properties and incentivise investments in energy efficiency improvements. Labour has indicated it would look to replace the business rates system altogether, with potential consultations on the horizon. Additionally, Labour’s commitment to strengthening devolution will empower local governments to tailor policies to regional economic needs, offering businesses like yours the chance to influence local policy-making
4. Employment policy and law reforms: Changes to employment law are on the horizon via Labour’s New Deal for Working People, including potential reforms to probation periods, statutory sick pay, and employment status. Businesses have legitimate concerns about the possible impact on workforce costs and Labour has committed to listen to business and labour unions as it turns its ideas into legislation. At the same time, the new government has pledged to increase the provision of skills by replacing the Apprenticeship Levy with a more flexible Growth and Skills Levy.

The importance of economic evidence 

In this dynamic policy environment, presenting compelling economic evidence is essential for businesses seeking to influence policy decisions. Here’s how you can prepare: 

1. Conduct comprehensive economic analysis: Understand the potential impact of new policies on your business. This includes analysing changes in taxation, public spending, and regulatory reforms. Use data to quantify these impacts and develop scenarios to anticipate different outcomes. This can help you provide a meaningful input into potential consultations on the horizon and voice your concerns ahead of the next fiscal event
2. Engage with policymakers: Establishing a dialogue with policymakers is crucial. Present your evidence-based insights to highlight how proposed changes will affect your business and the broader economy. This can help shape policies in a way that supports business growth and economic stability
3. Collaborate with industry groups: Joining forces with industry associations such as the CBI can amplify your voice. These groups often have established channels for policy advocacy and can help present a united front on key issues
4. Leverage local opportunities: With Labour’s focus on devolution, local governments and combined authorities will have more power to create tailored policy environments. Engage with local authorities and MPs in your area to influence policies that directly impact your business operations. 

Preparing for the next fiscal event 

The new Labour government’s policy agenda presents a complex landscape for businesses. By developing robust and compelling economic evidence, you can navigate this environment effectively and influence decisions at the next major fiscal event. Proactive engagement with policymakers, industry groups, and local authorities will be key to ensuring that your business is well-positioned to thrive in the years ahead. 

To be ready for the next major fiscal event and spending review (expected late October/ early November), businesses should: 

• Develop a policy advocacy plan: Outline your key policy priorities and the evidence supporting them. Identify the stakeholders you need to engage with and the channels through which you can influence policy decisions
• Stay informed: Keep abreast of policy developments and government announcements. This will enable you to respond quickly to new opportunities and challenges
• Invest in skills and technology: The new government’s emphasis on skills development and technological advancement presents opportunities for businesses to enhance productivity. Consider how you can leverage these initiatives to strengthen your workforce and improve operational efficiency
• Plan for tax changes: With potential changes to business taxation on the horizon, it’s important to review your tax strategy. Ensure you are prepared for any adjustments to corporation tax, business rates, capital gains tax, R&D tax credits and other relevant taxes. 

Is your business budget ready? Now is the time to prepare and make your case for policy change. 

How CBI Economics can help you 

When you’re looking to make a business decision or investment, shift public perception, or lobby for a policy change – you need compelling evidence. But precious few organisations have the kind of team, or depth of data, to achieve that in-house.

CBI Economics is your business’ economic consultancy, empowering you with the credible, impartial data and analysis you need to solve your challenges and succeed.

You’ll tap into a team of economic experts to receive a quantifiable narrative – grounded in real-world impact – that helps stakeholders to empathise with your view and act.

Solve any challenge with powerful evidence

If you’re a public affairs team wanting to land your campaign with policymakers effectively, we’ll build a compelling economic case for your arguments. Because the CBI truly understands how the government gathers evidence and makes decisions, you’ll be in the best possible position to drive change. 

If you’ve got important business decisions to make, we’ll analyse whether a specific investment will generate ROI, or what impact a policy or regulatory change could have on your organisation.

If you’re a Trade Association looking to plan and campaign effectively, we’ll provide the reliable business sentiment on specific issues in your sector, couched in a unique cross-economy understanding.

Or if you’re a private sector organisation looking to win over customers and boards, we’ll equip you with the evidence that showcases your positive impact on people, communities and economies. Together, we can launch reports into the media with greater impact – maximising your coverage. 

The insight you need to plan, change and succeed

We’re the trusted economic consultancy of choice for organisations across many industries, with a proven track record of delivering analysis that drives results. We’ve estimated the economic potential of achieving clean air for the Clean Air Fund. Scanned the horizon to help a nuclear waste management business plan for the future. Created the key piece of evidence used by the REC to urge MPs into action around labour shortages. Quantified the national, regional and local economic opportunities brought by the transition to net zero. And assessed the high-value opportunities brought by clusters of specialised business activity all across the UK. What could CBI Economics analysis do for your business? 

About CBI Economics

CBI Economics is one of several organisations that can help develop the evidence base necessary to support arguments for or against changes in policy. However, what is often missing in other organisations is a deep understanding of the government machinery, the policy landscape and the media environment. The strength of our knowledge in these areas enables us to be market leading when it comes to the impact of our work, be that framing the analysis such that it can be most effective in opening productive discussions with government departments or in creating media impact. At CBI Economics we have the unique expertise which brings these skills together.

Find out more about our services here and read our most recent work here.

If you think we can help you, please get in touch with our team here.