Choppy waters for firms must end, says lobby group

A lobby body representing thousands of UK firms has urged the next government to forge closer ties with the EU after years of "choppy times" for British business.

The British Chambers of Commerce (BCC), which represents over 19,000 companies and 18 million employees, said businesses are "not getting used to" post-Brexit trading rules.

The BCC published its manifesto as the election campaign entered its second week with the economy set as a key battle ground in the race for 10 Downing Street.

Overnight, the Conservatives and Labour clashed over VAT. Chancellor Jeremy Hunt claimed Sir Keir Starmer wanted to raise it, which Labour said was "absolute nonsense".

BCC president Baroness Lane Fox said the next government - whichever party wins - needs to "hit the ground running with meaningful action" to help business.

Speaking to Radio 4's Today programme, Shevaun Haviland, director general of the BCC said "the last few years have been choppy times for business", referring to Covid, inflation and high interest rates.

She added that the group wants to see less friction with the EU on trading goods and movement of people as businesses are "not getting used to" the increased paperwork since Brexit.

With trade agreements are up for review in a year's time, she called for any new deal make the import and export of food and freedom of movement for workers "simpler".

The BCC reiterated its call for business rates - which are a tax on a commercial properties such as shops - to be reformed to "encourage growth and investment".

It also said that artificial intelligence, or AI, could be " a real gamechanger for businesses".

But Ms Haviland said "small businesses are concerned about being left behind" and the next government needs to appoint an AI champion to bridge the gap between larger and smaller firms on use of the technology.

The document has been published as political parties spar over VAT.

Mr Hunt pledged in an article for the Daily Telegraph that the Conservatives would not raise the main rate of the sales tax during the next Parliament, and suggested Labour would.

However, shadow chancellor Rachel Reeves ruled out a VAT hike, and strongly refuted Mr Hunt suggestion. The Liberal Democrats also pledged not to raise VAT.

Labour and the Conservatives have also said they will not lift income tax or National Insurance.

But Paul Johnson, director of the Institute of Fiscal Studies, the independent think tank, said: “It is worth saying that it is not quite clear what they mean by not increasing things like income tax.

"We know it is baked into the numbers that income tax increases are happening over the next three years because thresholds and allowances are being frozen and that is a significant tax rise over the next few years so you can find ways of getting more money out of these taxes without raising the rates.