The IoD’s submission highlights concerns that confidence has remained subdued since 2024 amid uncertainty over taxation, rising employment costs and questions around policy coherence. The Institute argues that a successful Budget should restore predictability, reduce the risks associated with investing and hiring, and demonstrate a stronger focus on growth across government decision-making.
The IoD is urging the government to expand its existing corporate tax roadmap into a broader long-term framework covering the entire business tax system. The organisation says firms and investors need greater certainty about the future direction of tax policy and warns against further increases in taxes on business, investment and employment.
The submission also calls on ministers to use the implementation process for the Employment Rights Act to reduce risks to hiring, particularly for smaller firms and those offering entry-level opportunities. Recommendations include proportionate adjustments to trade union access provisions, guaranteed-hours rules, shift notification requirements and unfair dismissal reforms, alongside additional resources for Acas and employment tribunals.
On devolution, the IoD supports the government’s ambition to devolve power but argues that responsibilities should only be transferred where there is sufficient institutional capacity, stable funding and robust accountability. The organisation is calling for a cross-government Devolution Data and Statistics Delivery Plan and a shared performance dashboard to support effective local growth policy.
The submission further urges ministers to protect high-productivity infrastructure investment and maintain momentum towards the delivery of a third runway at Heathrow. The IoD argues that major infrastructure programmes need clear milestones, accountable leadership and transparent measures of success to improve delivery and attract private investment.
Finally, the organisation says the government should simplify support for technology adoption by bringing together existing AI and digital-adoption initiatives into a single national offer for SMEs through the Business Growth Service. It also recommends a new ‘Responsible AI Essentials’ programme to help smaller businesses adopt artificial intelligence securely and effectively.