Autumn Statement: Urgency, scale and delivery are the watchwords for growth
Reacting to the Chancellor’s Autumn Statement, John Longworth, Director General of the British Chambers of Commerce (BCC), said:
“Less than two weeks ago, the Prime Minister declared that Britain was in the midst of an ‘economic war’. Unfortunately, the measures set out in the government’s Autumn Statement fail to match the urgency of that declaration.
“Three words need to be on every minister’s lips: urgency, scale, and delivery. The Chancellor has taken a number of very positive steps, despite being constrained by politics, budgets, and Whitehall inertia. Business will cheer his announcement of major new capital allowances to encourage investment by small- and medium-sized companies, as well as his move to shift money from current spending towards the infrastructure needed for growth.
“However, the government is still tinkering around the edges. The Budget next March must make truly radical and large-scale choices that support long-term growth and wealth creation. That means reconsidering the ‘sacred cows’ of the political class, including overseas aid and the gargantuan scale of the welfare state. Only a wholesale re-prioritisation of resources, to unlock private sector finance, investment and jobs, will be enough to win the ‘economic war’ we are facing. The danger is that our political class is sleepwalking with its eyes open.”
Commenting on specific measures in the Autumn Statement, John Longworth, said:
ON CAPITAL ALLOWANCES FOR INVESTMENT
“Over £700bn is currently parked on business balance sheets, so we are pleased that the Chancellor has listened to business and is improving incentives for investment by small- and medium-sized companies by raising the annual investment allowance to £250,000 for the next two years.
“We are convinced that these stronger incentives will encourage small- and mid-sized companies to dust off their investment plans and get moving. If they have the confidence to move ahead with investment, their productivity will improve, their suppliers will benefit, and the export potential of UK plc will rise.”
ON EXPORTS AND INTERNATIONAL TRADE
“We are pleased that the Chancellor is listening to our call for greater investment in trade and export support, which can help companies break into new markets across the globe. Exporting businesses will welcome the commitment of £70m in new funding, as long as it is used to help them strengthen their exporting capability and to exploit opportunities in fast-growing markets overseas.
“We also welcome the fact that the government recognises the crucial role played by Chambers of Commerce, both here in the UK and overseas, as a unique resource for exporters, and as the first port of call for traders the world over.”
“The Chancellor’s announcement that current spending will be cut by £5bn to invest in infrastructure will please businesses up and down the country. Yet this commitment is just the tip of the iceberg. It’s not radical enough to unlock the resources needed to maintain and improve Britain’s business infrastructure.
“The political risks around infrastructure investment must be swept away – and fast – so that private finance can step in and shoulder some of the cost of our national infrastructure upgrade. And at the same time, public sector resources should be re-prioritised away from current spending towards jump-starting major infrastructure projects, which generate confidence in the short term, jobs in the medium term, and competitiveness for the long term.”
“While we note the Chancellor’s reconfirmation of £10bn in guarantees for the housing sector, he should have gone further and committed to building 100,000 new homes directly, which would deliver construction jobs, business for supply chains, and local confidence.”
ON BUSINESS FINANCE
“Following on from the poor early results from the Funding for Lending scheme this week, we are pleased that the Chancellor used the Autumn Statement to re-confirm his strong support for the creation of a British Business Bank.
“We are disappointed, however, that the Chancellor was unable give a clearer timetable for the bank’s creation. Ministers, as well as Business Bank supporters in the Opposition, must recognise the need for both urgency and scale when it comes to financing business growth.
“As we have said for many years, Britain’s business finance system is dysfunctional and restrains growth. The creation of a new, patient lender would be a game-changer for dynamic and growing companies seeking to expand here in the UK.”
ON THE HESELTINE REPORT AND LOCAL GROWTH
“The Chancellor has taken a decisive and radical step by endorsing Lord Heseltine’s proposal for more local control over economic growth funding in England. The question is whether this proposed shift from central to local control will actually happen in practice, or whether it will be scuppered by Whitehall.
“Chambers of Commerce are great advocates of local solutions for local growth. They have and will continue to work closely with local authorities, Local Enterprise Partnerships and others to build stronger places, stronger business support, and stronger exporters.”
“The introduction of a lower annual pension contribution limit of £40,000 is a disappointing move from a government that labels itself pro-growth. For aspirational entrepreneurs and businesspeople, the ability to make significant pension contributions while taking major risks is a huge incentive and enables them to make up for lean years when times are better. We fear that this move will stop many dynamic entrepreneurs from doing all they can to create growth and jobs.”
ON BUSINESS TAXATION
“There is real and justifiable anger amongst many small- and medium-sized businesses when they hear about aggressive tax avoidance schemes used by some of the biggest companies operating in the UK. That anger is growing, and must be addressed.
“However, there is a fine line to tread here. It would be naive and self-defeating for Britain’s political and media class to chase away major companies that generate jobs and investment.”