Shanika Amarasekara, FLA CEO says the chancellor cannot fund growth alone. But Britain can finance it
As the chancellor prepares to deliver his Budget, the debate is understandably dominated by difficult choices about taxation, public spending and the cost of living.
Inflation has risen, borrowing costs remain a concern, and businesses are looking for reassurance that the economic environment will allow them to plan and invest.
There is no escaping the difficult decisions facing the government. But there is a bigger question that deserves more attention.
How do we unlock the investment Britain needs to grow, when the public finances are under such pressure?
Part of the answer is already in front of us.
Every day, businesses across the UK use finance to acquire the machinery, equipment, vehicles and technology they need to operate, compete and grow. Households use finance to access essential goods, improve their homes and manage major purchases.
These are not abstract financial transactions. They are the practical investments that underpin economic activity.
And their collective contribution is substantial.
In 2025, members of the Finance & Leasing Association provided £163bn of new finance to UK households and businesses. They financed more than a third of UK investment in machinery, equipment and vehicles.
The latest figures show that this contribution continues. In the first eight months of 2026, FLA members provided nearly £111bn of new finance, including £27.5bn to support business investment.
Behind those numbers are businesses investing in new production lines, construction companies acquiring equipment, logistics firms modernising their fleets and households making important financial decisions.
This is finance doing what it does best: enabling economic activity that would otherwise be delayed, constrained or simply not happen.
From ambition to investment
The government has rightly made growth, productivity and investment central to its economic agenda.
But growth does not happen simply because we set national targets or announce major infrastructure projects.
It happens when thousands of businesses have the confidence and financial capacity to invest.
A manufacturer buying new machinery. A small business adopting technology. A transport company replacing ageing vehicles. An entrepreneur expanding into new markets.
Individually, these decisions may not make headlines. Collectively, they determine Britain’s economic future.
And while much of the national conversation focuses on how to increase the supply of capital, we should pay equal attention to how that capital reaches the businesses that need it.
For many SMEs, the challenge is not necessarily a complete absence of finance. It may be knowing what finance is available, understanding which product is appropriate, or having the confidence to commit to an investment.
That is why the FLA has proposed a new Productive Finance Partnership, bringing together the British Business Bank, institutional investors and specialist lenders to channel more capital into productive SME investment.
We have also proposed an industry-funded Ready for Finance service to help businesses better understand their financing options and prepare for investment.
These are practical ideas designed to connect capital with opportunity.
Confidence matters as much as capital
The latest economic news is a reminder that businesses and households are operating in an uncertain environment.
Higher energy costs, inflation and concerns about future taxation can all make businesses hesitate before committing to investment.
Finance can help businesses spread the cost of essential assets over their useful lives. But finance cannot, on its own, overcome a lack of confidence.
Businesses need greater certainty about the costs of investment, the tax environment and the regulatory conditions in which they operate.
This is particularly important for SMEs, which are often the businesses with the greatest potential to improve productivity through investment in equipment and technology, but which may also have the least capacity to absorb unexpected costs.
The Budget should therefore encourage productive investment, provide greater policy stability and ensure that the UK’s tax and regulatory frameworks support the effective use of finance.
Growth also improves household finances
The same principles apply to households.
If we want families to benefit from lower energy costs, cleaner transport and improved living standards, we need to think about how those investments can be made affordable.
Take home energy efficiency.
Better insulation, heating systems and other improvements can reduce energy consumption and help households manage costs over time. But the upfront expense can be a significant obstacle.
Private finance, supported by appropriate consumer protections and well-designed government policy, can help households make these investments.
Similarly, the transition to electric vehicles will depend not only on charging infrastructure and environmental ambition, but on whether consumers and businesses can afford to make the switch.
A coherent and predictable approach to electric vehicle taxation is essential if we want to encourage adoption rather than create further uncertainty.
The opportunity is to use private finance alongside public policy to help households reduce costs and participate in the transition to a more productive, lower-carbon economy.
A regulatory framework that supports responsible growth
There is one further ingredient that cannot be overlooked.
Britain needs a financial regulatory framework that protects consumers, supports competition and enables responsible lenders to provide the finance on which households and businesses depend.
These objectives should reinforce one another.
Modernising outdated consumer credit legislation, providing regulatory certainty and ensuring that rules are proportionate can help reduce unnecessary complexity without weakening important protections.
That matters because the ability of lenders to finance the real economy depends on a stable, competitive and well-functioning market.
Good regulation should enable responsible finance to flourish.
The opportunity for the chancellor
The chancellor faces difficult fiscal choices. No single Budget can resolve every structural challenge facing the UK economy.
But the government does have an opportunity to establish the conditions for stronger private investment.
That means supporting SMEs to invest in productive assets, making it easier for businesses to access appropriate finance, encouraging investment that reduces household costs and maintaining a regulatory environment that supports responsible lending.
Most importantly, it means recognising that the finance industry is not simply a beneficiary of economic growth.
It is one of the mechanisms through which growth happens.
The FLA and its members stand ready to work with government to turn that recognition into practical action.
Britain’s growth ambitions are substantial. The public finances are constrained. But there is considerable capacity, expertise and capital across the private sector that can help deliver the investment the country needs.
The task now is to connect that capital with opportunity.
The chancellor cannot fund growth alone. But with the right conditions, Britain can finance it.