Chancellor urged by Business West to be brave in the Budget and favour growth over giveaways

November 20, 2017

Business West, the region’s largest business organisation, today called on Chancellor Philip Hammond to “be brave, but invest in the long term” in Wednesday’s Budget.

The group, which runs the Swindon & Wiltshire Initiative, said businesses’ patience was wearing thin with a government that was failing to set the foundations of a post-Brexit economy. 

At the same time, businesses in the region were “lamenting the shortcomings of the UK’s infrastructure”, it claimed. However, what was needed was growth, not giveaways. 

Government policies had not delivered the quantity and quality of transport and communication connections or housing needed in the right places.

The Chancellor had to use this Budget to commit to seeing through the delivery of projects vital to economic success.

Business West managing director Phil Smith, pictured, said: “Without question, businesses want the best possible Brexit deal, but our members tell us time after time that they feel like they are in purgatory.

“Ignorance certainly isn’t bliss when it comes to our future trading relationship with our largest trading partner.

“Yet, if we don’t create the conditions for growth at home, we won’t be in a position to meet the challenges, or take advantage of the opportunities, of our new place outside the EU.”

He said too often infrastructure projects got kicked into the long grass, leaving existing networks under pressure and at over capacity.

“The green light for big rail plans, and bringing forward investment in the road network, will go a long way to increasing connectivity to markets, spurring job creation and boosting business confidence. More direct investment in house-building, too, would have a similar effect,” said Mr Smith.

“On the other side of the same coin, is investment in our digital infrastructure. I hear all too often from companies in all corners of the region how poor mobile coverage has undermined their productivity and ability to connect with customers and suppliers.

“Getting these basics right will be crucial if the UK is to showcase itself as an enterprising and competitive place to do business in the future.  

“My message to Mr Hammond (pictured) is this: be brave, but invest in the long term.”

When the UK compared itself to its global competitors, how many UK industries could be identified as truly world beating? Mr Smith said.

“Financial and professional services, aerospace and defence, precision engineering and pharmaceuticals all feature. Perhaps, we could add creative industries to the mix, but beyond that where are the genuine, British world-beaters?

“To their credit, government has funnelled a great deal of time and money into supporting some of the aforementioned industries, yet in so many other areas, however, enterprise is being neglected or stifled through a lack of investment, over-regulation or both,” he said.

“Simply put, we are not creating conditions for a productive, high-skilled economy.

“It is a constant source of worry that despite possessing some of the world’s greatest universities and attracting some of the highest calibre talent, we still don’t seem able to build an Apple, Facebook or Google for example.

“While Theresa May announced at the CBI’s recent conference that the government’s eagerly, anticipated industrial strategy will be released this month, the Chancellor needs to start to get the house in order to begin to help business, without giving into temptation and announcing a raft of giveaways.”

The government had long banged the drum that lowering Corporation Tax was the solution to boosting business investment. The reality was that the burden of upfront costs and taxes that hit firms before they begin to make a profit hindered business growth and investment far more than the level of tax they were asked to contribute once they had made a profit, said Mr Smith. 

“What’s more the Chancellor must take big and bold action to incentivise firms to invest.

“At the moment, we’re seeing business investment lag, as firms hesitate to take the plunge while so much uncertainty remains. The Treasury must encourage and support firms to put money back into investment, which in turn will raise wages and living standards for us all.

“Each of these would be absolute imperatives, even if the referendum of June 2016 never actually happened.”

Swindon Business News will carry live, as-it-happens coverage of Wednesday’s Budget on its website, with a full round-up of regional comment and analysis in this Thursday’s Swindon Business News e-bulletin.


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