Spring Statement: National business reaction

March 13, 2019

The CBI said Chancellor Philip Hammond made an admirable attempt to set out a long-term vision for the UK economy in his Spring Statement against a hugely uncertain political backdrop.

But the pro-Europe business organisation – which is strongly opposed to a no-deal departure from the EU – said he remained “shackled by Brexit”.

Its chief economist Rain Newton-Smith said:“This year’s forecast downgrade [from 1.6% growth to 1.2%] brings the danger of no deal to the UK economy sharply into view. It must be avoided.

“Meanwhile, space must be found for the UK’s domestic agenda. Standing still while the world continues to turn is not an option.

“The Chancellor’s rightly identified the need to go further and faster in combating climate change. His ambition for all new homes to be heated sustainably will ensure we make better progress towards a zero-carbon economy.”

The CBI also welcomed measures to encourage prompt payment by larger business to small suppliers.

However, it warned that going it alone on a mooted digital services tax was high risk, especially at a time when the UK already “looked increasingly isolated”.

Ms Newton-Smith added: “The EU has dropped their plans and got behind the OECD’s efforts – the UK should follow suit. The government needs to be doing all it can to encourage investment in the UK and adoption of new technologies, not putting up barriers.” 

The Federation of Small Businesses (FSB) also welcomed the measures to stamp out late payment.

National chairman Mike Cherry said: “At a time of great uncertainty, the Chancellor has shown today that there is still plenty of scope to support the UK’s small businesses. Poor payment practices by big businesses towards their smaller suppliers are rife and pernicious, leading to the closure of 50,000 small firms a year.

“Four out of five small businesses have been paid late, and we told the Chancellor that today was the moment to act, to tackle this scourge once and for all.”

TUC general secretary Frances O’Grady said working people were paying the price for the Prime Minister’s “disastrous” mishandling of Brexit, while the chancellor patted himself on the back. 

“Jobs are being lost, plants are under threat and much-needed investment is being cancelled,” she said.

“The government created this mess – it must clean it up. That means taking no-deal off the table and seeking an extension of Article 50.

“We need a deal that puts jobs, rights and peace in Northern Ireland first.

“And we need a financial settlement that supports industry and ends austerity once and for all.”

More on this story follows  . . .

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