Britain's tradition of bi-annual fiscal announcements is creating a crippling 'tax of uncertainty' that is paralysing investment and holding back the economy, according to Labour MP Liam Byrne. The verdict comes from hundreds of businesses met by the Business Committee on a road-trip from Cambridge to Edinburgh.
The High Cost of Fiscal Instability
Despite the UK's history of inventive genius, from the Industrial Revolution to pioneering global brands, Britain's first-class ingenuity is now being held back by a second-class growth machine. The core issue, as identified by businesses, is a lack of economic stability. Investors consistently reported that when ministers float numerous tax ideas in a short period, such as 13 different proposals in just two months, investment committees simply hit pause.
The International Monetary Fund has clear guidance: countries that budget for healthy fiscal headroom make better decisions. Byrne argues for much bigger fiscal buffers and an end to the bi-annual fiscal circus that paralyses investment for half the year. For a nation seeking more factories, labs, and scale-ups, predictability is paramount. Uncertainty is a tax – and business can’t bear much more.
Five Shifts to Power Britain's Growth Engine
The business community has outlined five critical shifts needed to revitalise the UK economy. First, the nation must mobilise capital by providing certainty. While Britain is not short of savings, it lacks economic stability. This new-found certainty would help attract foreign direct investment, but more importantly, it could fuel a 'UKDI' revolution – redirecting the trillions in British savings currently flowing abroad back home to support domestic talent.
Public finance institutions, like an expanded British Business Bank, should act as co-investors to crowd in private capital. Furthermore, public procurement, which represents one pound in every six of the UK economy, must become a lever for innovation and local growth. Contracts from the NHS to defence should reward ingenuity and those willing to invest in Britain.
Cutting Costs and Mobilising Talent
Second, Britain must improve business return on investment by attacking controllable costs. While higher employer costs are locked in, energy prices are destroying Britain’s competitiveness. When flagship plants like Nissan's in Sunderland face some of the world's highest electricity costs, it demands action. Cheap, clean, reliable power is now a fundamental manufacturing strategy, not just a climate commitment.
Alongside power costs, the burden of red tape must be cut. Businesses are exhausted by regulators that don't collaborate and operate at a leisurely twentieth-century pace. The call is for more red carpet and less red tape.
Third, the UK must mobilise talent with a skills system that keeps pace with technology. Britain's 'talent density' is a key advantage, but the pipeline for young workers is broken. With a million young people not in education, employment, or training, achieving 'NEET Zero' is vital. This requires a new skills partnership between business, colleges, and local leaders, focused on technical mastery and lifelong learning.
Fixing Government and Boosting Exports
Fourth, government itself needs repair. Too many departments operate on Whitehall time while the economy moves at network speed. The solution involves a reinvention of government: flatter structures, digitised services, deeper devolution, and faster decisions. Local leaders need the tools and accountability to act on housing, transport, and growth.
Finally, Britain must move from signing trade deals to actually shifting freight and selling services. UK firms need larger markets, which means busting the bureaucracy that stops business exporting. Exporters grow twice as fast as domestic-only firms, yet too many still face border friction. The UK-US Economic Prosperity Deal and a reset with Europe offer promise, but only if they work in practice, not just in press releases.
The task ahead is clear. Britain cannot legislate for genius, but it can rebuild a system that turns genius into growth: one that is stable, ambitious, competitive, skilled, capable, and open. This is the pathway to making Britain the best place in the world to build a business.
