Ahead of the UK Budget on Wednesday, Professor Joe Nellis, economic adviser at MHA, shares his call to action to the Chancellor.
This includes:
- Using the Government’s large parliamentary majority to drive reforms that will benefit the UK economy in the long-term, even if unpopular in the short-term.
- Being bold and decisive without resorting to political theatre and over-complicating the tax system.
- Backing the energy transition and making the UK a clean energy superpower.
Joe is available for written and broadcast commentary this week to unpack the all-important decisions the Chancellor will announce on Wednesday.
UK business needs a bold Budget reset to ignite growth
Professor Joe Nellis is economic adviser at MHA, the accountancy and advisory firm.
With the Budget now days away, the UK’s business community urgently needs to see a decisive shift in strategy. After several years of disappointingly weak economic growth, falling corporate investment, and heavy cost pressures, this Budget must lay the foundation for longer-term, sustainable growth. The Chancellor now faces a pivotal moment: either deliver a credible plan that restores the UK’s competitiveness or risk another year of drift in which businesses continue to hold back much-needed investment spending and hiring.
What the Chancellor must avoid
Above all, the Budget cannot descend into political theatre. Businesses are weary of temporary headline-grabbing gimmicks, one-off schemes, and initiatives that disappear within months. These measures do little to improve business confidence and often add layers of complexity that hinder long-term planning. The Government still holds a very large parliamentary majority, and they have little reason to call an election until 2029 — they should use this political capital to enact long-term reforms that drive sustainable growth and provide businesses with consistent economic policy and direction, rather than chasing a short-term boost in the polls.
The Chancellor should resist tinkering with the tax system merely for the sake of it. Yes, fiscal stability must be maintained, but continually adjusting tax thresholds, inventing new reliefs, or creating short-lived incentives undermines the stability that businesses depend on when making multi-year investment decisions. The alleged U-turn on raising income tax is good if it means economic forecasts are better than expected, but not if they are set to be replaced by a number of smaller tweaks to the tax system. Greater complexity is not good for business.
Equally, the Budget must avoid deferring difficult reforms. Whether on planning, infrastructure, regulation, or skills, delay is now economically costly. Businesses are navigating higher financing costs, persistent inflation in services, and global competition for capital. Hesitation in Westminster translates directly into lost investment on the ground.
Finally, the Government must avoid signalling any erosion of fiscal credibility. Debt interest costs are a drain on government finances; any hint of fiscal drift risks pushing gilt yields upward, tightening credit conditions for companies already under pressure. Business investment thrives on stability and market fright is the last thing the economy needs this winter.
What the Chancellor must do
To rebuild momentum in 2026 and beyond, the UK needs a Budget that speaks directly to the needs of businesses across the economy — from advanced manufacturing and financial services to retail, logistics, technology, and professional services.
- Provide a long-term business investment framework
Capital allowances, R&D incentives, and industrial strategy priorities must be stable, predictable, and multi-year. Investment is the engine of growth but the UK’s biggest barrier to investment is uncertainty. A clear roadmap, not another cycle of short-termism, will unlock stalled projects in energy, manufacturing, tech and transport. - Deliver a national skills plan that matches the needs of business
Acute skill shortages in engineering, digital, green technologies, and logistics are holding back growth. Reforming the apprenticeship levy, supporting mid-career upskilling, and partnering with industry on further/higher education and specialised training centres will give businesses the workforce they need to compete globally. - Accelerate planning and infrastructure
Slow planning approvals remain one of the UK’s biggest obstacles to investment. Faster decisions on energy infrastructure, industrial zones, scientific research hubs, housing developments and transport upgrades would send a powerful signal that the UK is finally serious about economic renewal. - Back the energy transition with real certainty
Businesses need stable, long-term policy on renewables, grid upgrades, carbon capture, nuclear, and green finance. Clear signals will unlock major private investment and position the UK as a global leader in clean growth. - Boost the UK’s attractiveness as a business location
The Budget should reinforce a competitive corporate tax environment, streamline regulation, support high-value exports, and invest in capabilities that attract international capital — from life sciences to artificial intelligence to creative industries. - Raise the right taxes
Increasing the tax burden is not conducive for growth, but with spending cuts seemingly difficult to get through Parliament and growth not forthcoming, it remains the only way for the Chancellor to maintain adherence to her fiscal rules. The Chancellor must ensure she raises taxes that do not undermine corporate investment, prompt the flight of ambitious entrepreneurs, and subdue growth. A ‘sinners’ tax’ on gambling, alcohol, tobacco, and unhealthy food would be sensible — estimates suggest that this could raise £3.2bn. Changes to property tax remain necessary but difficult to balance fairly.
The Budget must set the tone for a brighter future
Businesses do not expect miracles on Wednesday. But they do expect direction, ambition, and a commitment to rebuilding the UK’s competitiveness.
Looking ahead to 2026, inflation is expected to moderate, interest rates may be reduced, household spending could gradually recover, and businesses are likely to experience the positive effects of investments in productivity-enhancing technology. A credible growth strategy could transform the outlook for 2026, unleashing pent-up investment, strengthening productivity, and restoring confidence after a long period of volatility.
This Budget is not just another fiscal event. It is the moment for the Chancellor to show that the UK is ready to lead again — boldly, confidently, and with a long-term vision that businesses can believe in.
