BRITAIN doesn’t have a productivity problem – it has a confidence problem
That’s the claim of JF Hornby & Co Managing Director, Paul Hornby, who has spoken out as businesses brace themselves for this month’s Budget.
Paul says the Keir Starmer’s beleaguered Government’s stop-start approach to economic policy is eroding business confidence and holding the country back.
“Every time business starts to believe the worst is behind it, along comes another policy shift or tax tweak to knock it back,” he said. “Britain doesn’t have a productivity problem – it has a confidence problem, and Westminster is to blame.”
According to the Institute of Chartered Accountants in England & Wales (ICAEW), business confidence fell sharply in the third quarter of 2025, dropping to -7.3 from -4.2 in the previous quarter.
Productivity growth remains flat too: the Office for National Statistics (ONS) reports that output per hour worked is just 2.1% higher than before the pandemic and actually fell 0.2% year-on-year in early 2025.
And confidence among business leaders has hit a new low. The Institute of Directors (IoD) Economic Confidence Index plunged to -72 in July 2025, the lowest level since records began in 2016. Investment intentions collapsed to -27, while export expectations slipped into negative territory at -4.
Paul believes this collapse in confidence is the real anchor weighing down the economy.
“Entrepreneurs are being asked to take risks in a system that feels completely unpredictable and where the rewards are ever slimmer.
“Every few months, the rules change – whether it’s tax thresholds, National Insurance or capital allowances. You can’t plan for growth when the ground keeps shifting beneath you.”
Chancellor: Rachel Reeves. Image courtesy of UK parliament.
Instead of more headline-grabbing giveaways, Paul is calling for stability and consistency – the kind of environment where businesses can plan, invest and hire with confidence.
“A stable tax regime would do more for growth than any political soundbite,” he said. “Confidence drives investment, not uncertainty.
“The best thing the Chancellor could do this month is stop tinkering, set out a clear long-term path, and stick to it.”
Paul argues that small and medium-sized businesses – the backbone of the UK economy – have been treated like an ATM for too long, hit by punitive fiscal changes dressed up as reform.
“The Chancellor says she wants growth, but she’s forgotten who creates it. It’s not Whitehall – it’s the business owners putting their necks on the line every day. Give them consistency, give them clarity, and you’ll get growth.”
With the November Budget fast approaching, his message to the Treasury is clear: restore confidence first, and productivity will follow.
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