Ahead of the 2026 Budget, the UK's leading business organisations submitted detailed representations to HM Treasury setting out what founders and business owners across the country needed most. From employer National Insurance and business rates to energy costs and late payments, here is what business really asked for - and why it matters to every founder running a small or growing business in Britain today.
In September 2026, Frankie Dyer sat down and wrote an open letter to the Prime Minister.
Frankie is 38. She runs Barbakan, an artisan bakery and delicatessen in Chorlton, Manchester. The business employs around 50 people and turns over more than £2.3 million a year. By any measure, it is a successful, thriving independent business - the kind of business that holds a high street together.
And yet, as Frankie wrote, the bank balance was depleted and weekly bills were increasingly difficult to meet. Her letter, addressed to Andy Burnham, set out what she called a hostile environment for high street businesses: the compounding weight of post-COVID recovery, soaring energy and raw material costs, rising wages, pension contributions, 25% Corporation Tax, business rates, and employer National Insurance. Each one manageable on its own, perhaps. Together, they were slowly draining the life from a business that was doing everything right.
The letter reached one million views in two days. Thousands of SME owners wrote to say they were living the same story. Manchester Mayor Bev Craig publicly backed the campaign. It became a national moment - the point at which a founder said, clearly and publicly, what the data had been saying for months.
Frankie's letter is the human version of what you are about to read.
What the Submissions Showed
In the weeks before the 2026 Budget, the UK's principal business organisations - the British Chambers of Commerce, the Institute of Directors, the Federation of Small Businesses, the ICAEW, Make UK, UK Finance, the Home Builders Federation and UKHospitality, among others - submitted their representations to HM Treasury.
The picture they painted was consistent. Britain did not have an ambition problem. It had a confidence problem. Capital investment had fallen to levels unseen since the pandemic. The Federation of Small Businesses reported confidence at minus 58 on its index, with 30% of small firms bracing for contraction, downsizing or closure. In London, 90% of businesses had completely halted recruitment.
The underlying cause was not any single policy. It was the cumulative weight of rising costs that must be paid before a business earns a penny of profit - employment taxes, energy bills, business rates, regulatory compliance - compounding year on year. Policy-driven operating costs for SMEs had expanded by more than 70% over the preceding decade.
Seven clear priorities emerged. Here is what business asked for, and why.
1. Cut the Cost of Employing People
This was the single most urgent request across every major business body.
In 2024, the government restructured employer National Insurance Contributions - lowering the secondary earnings threshold from £9,100 to £5,000 while raising the rate from 13.8% to 15%. The effect was an immediate cost increase of approximately £950 per employee per year across manufacturing alone. Because the threshold reduction concentrated the tax on the first pounds of earnings, it hit hardest on entry-level, apprenticeship and part-time positions - exactly the roles that small and growing businesses create most.
On top of this came the National Living Wage, which had risen 46% since 2020, and the approaching compliance costs of the Employment Rights Act.
The result was visible everywhere. In London, 90% of firms halted recruitment entirely. Across the country, businesses paused entry-level and apprentice intake. Between October 2024 and April 2025, 167,000 employee jobs disappeared - far exceeding the government's own projections.
What business asked for: raise the employer NIC threshold back toward £7,500–£10,000; zero-rate employer NICs for workers aged 21–24 and for young people coming out of long-term unemployment; index the Employment Allowance to future minimum wage rises so that mandatory pay increases stop pulling micro-businesses into punitive tax brackets.
2. Fix Energy Pricing
British manufacturers pay the highest industrial electricity tariffs among developed economies. That is a structural problem, and it is largely driven by policy choices rather than commodity markets.
The issue is where the cost of decarbonisation sits. Social and environmental levies - the Renewables Obligation, the Feed-in Tariff, the Climate Change Levy - are loaded directly onto commercial electricity bills rather than being funded through general taxation. The result is that businesses are penalised for using electricity, which is exactly the opposite of what a net zero transition requires. Meanwhile, 58% of manufacturers pass the costs straight through their supply chains, meaning the pressure cascades all the way down.
Make UK calculated that every £10 per megawatt hour reduction in industrial electricity costs would boost national economic output by £800 million a year.
What business asked for: shift decarbonisation levies off commercial bills and into general taxation; expand the British Industrial Competitiveness Scheme to cover all 130,000 UK manufacturers (it currently reaches only 1 in 10); review network charges, which surged 33% between 2024 and 2025 and are projected to rise another 23% by 2027.
3. Overhaul Business Rates
Business rates were condemned unanimously across every submission as an antiquated tax that penalises physical presence and productive investment.
The problem is structural. Business rates are assessed on the nominal value of a property, not on whether the business occupying it is profitable, growing, or barely surviving. They are an overhead that must be paid regardless of trading conditions, and the UK is an international outlier in how heavily it applies them: recurrent taxes on commercial property amount to 1.05% of the private capital stock here, compared with 0.39% in France and 0.14% in Germany.
The 2026 rating revaluation made things worse, delivering an average 10% spike in rateable values that added £939 million in overheads to industrial premises alone. For high street businesses - hospitality, retail, leisure - the combination of rising rates and rising employer costs was existential.
What business asked for: 100% transitional relief for manufacturers in 2026/27; an immediate freeze on the rates multiplier; a cut of at least 1p (costing £820 million) with a path toward a uniform 40p multiplier; expanded discounts for hospitality, retail and leisure; and in the longer term, a fundamental shift away from taxing premises toward taxing performance.
4. Give Businesses Fiscal Certainty
This one is less about money and more about confidence - but the effect on investment is just as real.
The cycle is now familiar: months of pre-Budget speculation about changes to Capital Gains Tax, sector levies, inheritance allowances. Businesses defer capital expenditure, delay asset disposals, put off succession planning. The speculation itself becomes a drag on growth.
The ICAEW found that over two-thirds of professional accountants said greater certainty over tax and regulation would directly increase their clients' investment over a three-year horizon. Seventy-one percent of IoD directors reported that ongoing tax uncertainty had actively degraded their expectations for UK growth.
What business asked for: expand the narrow Corporate Tax Roadmap into a comprehensive 5-to-10-year framework covering capital gains, employment taxes and property levies; an explicit commitment that the aggregate tax burden on business would not increase further during this Parliament; and restraint on rushed changes to Capital Gains Tax, which had already seen a surge in pre-emptive disposals.
5. Fix the Skills System
Despite the labour market cooling, 26% of business leaders cited skill shortages as an ongoing barrier to output. The existing system - centred on the Apprenticeship Levy and its transition to the Growth and Skills Levy - was described consistently as excessively rigid, administratively burdensome and poorly aligned with what businesses actually need.
The numbers are stark. Apprenticeship starts across engineering and manufacturing have declined by more than 40%. Current funding caps force employers to absorb shortfalls of up to £8,000 per apprentice. And £2.14 billion in unspent levy funds sit retained by HM Treasury - money that businesses have paid in and cannot access for the modular training and workforce development they need.
What business asked for: release the unspent levy funds for modular learning, short courses and workforce retraining; raise the maximum apprenticeship funding band from £27,000 to £35,000 for advanced manufacturing roles; create a 20% SME Skills Tax Credit (capped at £5,000 per firm) to unlock employer investment in training.
6. Unclog Planning and Infrastructure
The physical realities of building anything in Britain - securing planning permission, connecting to utilities, delivering commercial and residential developments - emerged as a critical bottleneck tying up billions in private capital.
Regulatory interventions, environmental mandates and policy levies have added an average of £76,000 to the baseline cost of constructing a new home compared to 2020 levels. In London, 74% of employers identified housing affordability as a direct constraint on their ability to recruit and retain staff. Home ownership among young Londoners has dropped to just 13%, compared with 28% across the rest of the UK.
The planning system itself is drastically under-resourced: the national local authority planning staff stands at 1,400 against a statutory target of 2,200, meaning that even viable projects sit in backlogs for months.
What business asked for: invest £62–67 million to recruit 800 additional local authority planners; cancel the Building Safety Levy (which adds £2,300 per plot across 3,700 developments despite £2.6 billion in existing building safety funds remaining unallocated); mandate standard cascade mechanisms in Section 106 agreements and deploy the £9 billion in unspent Section 106 and Community Infrastructure Levy contributions currently sitting dormant in local authority accounts.
7. Cut Regulation and Fix Late Payments
Two-thirds of small businesses told the FSB that the regulatory burden outweighs its benefits. For owner-managed businesses, compliance frequently means diverting time and attention from commercial operations to administrative reporting - time that a founder running a growing business simply does not have.
But the most damaging pressure of all may be the simplest to fix: late payment. The FSB reported that chronic late commercial payments cause the insolvency of 38 small businesses every single day across the UK. Thirty-eight, every day. It is an involuntary extraction of working capital from supply chains, and it falls hardest on the smallest businesses with the least resilience.
What business asked for: deliver the government's 25% administrative burden reduction target (worth £5.6 billion in annual savings); introduce a Small Business Bill with enforceable statutory payment deadlines and expanded powers for the Small Business Commissioner; and on the trade side, restart the Single Trade Window border clearance system and finalise a UK-EU veterinary agreement alongside reciprocal youth mobility arrangements.
What This Adds Up To
Read together, these seven priorities tell a single story. British business is not short of ambition, ideas or talent. What it is short of is breathing room. The cumulative weight of employment taxes, energy costs, business rates, regulatory burden, skills shortages, planning delays and late payments is compressing margins to the point where even successful, well-run businesses - businesses like Frankie Dyer's - are struggling to invest, hire and grow.
The organisations that submitted these representations were not asking for handouts. They were asking for a policy environment that makes it possible to do what businesses do: create jobs, serve customers, build something that lasts.
In Part 2 on the UK Budget 2026, I'll look at what business actually got.
References
This article draws on the pre-Budget representations submitted to HM Treasury by the following organisations:
Frankie Dyer's open letter and subsequent coverage can be found at BBC News and The Manc.
I work with purpose-led founders and leaders at every stage of growth. If this piece has sparked something - and you'd like to think about what it means for your business, I'd welcome a conversation.
