Some of the UK’s most influential trade bodies have welcomed Philip Hammond’s commitment to bolstering businesses in his Spring Statement, but have also warned that more still needs to be done to support companies as the UK hurtles towards Brexit.
Mr Hammond announced on Tuesday that the Government had marginally revised up its growth forecast and slightly decreased its public sector net borrowing prediction. He said that a business rate revaluation would happen a year earlier than expected, that more money would be pumped into affordable housing, and that a call for evidence would be launched into measures to end late payments – a practice that’s been crippling thousands of small businesses for years.
Business leaders largely welcomed the move, but also said that it was important that the Chancellor doesn’t let politics get in the way of these plans, especially as the UK heads towards Brexit.
“Businesses will be encouraged by the Chancellor’s report on the UK’s fiscal health, with lower projections for the deficit and falling national debt, as well as his full-throated defence of the market economy and the role of the private sector in delivering prosperity,” said Adam Marshall, director-general of the British Chambers of Commerce.
“Yet as deficit and debt levels improve, the Chancellor must resist calls to pour money into politically-attractive, short-term spending priorities,” he said.
“Any headroom the Chancellor has must be used to leave a lasting mark on the UK’s infrastructure and to attract investment – particularly with the challenges and changes of Brexit ahead.”
Mr Marshall said that a “far stronger push” is still needed to “fund and fix the fundamentals here in the UK over the coming months”.
Going forward, he said that businesses want to see the Chancellor use this year’s Autumn Budget to double down and increase spending to even further improve digital connectivity, deliver road and rail improvements, strengthen the UK’s energy security and build more houses.
“Existing plans alone are not enough.”
Rain Newton-Smith, chief economist at the Confederation of British Industry, largely echoed Mr Marshall’s remarks, saying that it was “great to see an upgrade in the state of our public finances and rightly sensible to set more aside for a rainy day with Brexit uncertainty still weighing on the economy”.
Nonetheless, she also cautioned that economic growth in the UK remains “lukewarm” and that it was important for Government to address this.
“This underlines just how vital it is to secure a Brexit that delivers for jobs and an industrial strategy that helps transform UK productivity in all corners of the country,” she said.
Ms Newton-Smith particularly welcomed Mr Hammonds call for evidence to share best practice on productivity.
“Many British businesses are at the cutting edge of innovation, but others need a helping hand to take on the tried and tested technologies that drive growth. The Chancellor is right to recognise the importance of this to our future productivity performance,” she said.
“Great businesses act like magpies, collecting new ideas to boost productivity. But like ostriches, some can bury their heads in the sand and ignore the opportunities in front of them. The Government and businesses will need to work together across sectors and supply chains to spread best practice and make sure magpies win the day.”