A budget to support investment and growth – or a gamble?

Neil Ashbridge, Chair of Liverpool & Sefton Chambers of Commerce provides some thoughts on the Budget.

Posted by Neil Ashbridge

Fri 02nd, Nov

Despite the fact that so many details of the Budget had already been published or discussed in various parts of the media, Philip Hammond still managed to surprise political commentators and adversaries.

There was certainly good news for business with support for investment and growth. The Office for Budget Responsibility (OBR) and Institute of Fiscal Studies (IFS) have both however sounded a note of caution and if not quite the Sword of Damocles, the uncertainty around Brexit also continues to cast a shadow with the news that a new budget will need to be set if there is a no deal Brexit.

On the positive side there was certainly enough for business to celebrate, including the increase in the Annual Investment Allowance to £1m and reducing the cost of apprenticeship training for SMEs, both of which should provide companies with the confidence to invest in capital assets as well as in their workforce. Maintaining the VAT threshold and support for UK high streets are also to be welcomed.

The Liverpool city region will benefit from the announcement that £37 million of funding will be available for Northern Powerhouse Rail to develop a fast rail link between Liverpool and Leeds. Extra funding will also be available to the metro mayors with the city region receiving £38.5m under the Transforming Cities Fund.

So is it fair to call the budget a “bit of a gamble”?

The OBR’s confirmation that the UK’s fiscal outlook is healthier than they expected, with the forecast for 2019 upgraded to 1.6 per cent (previously 1.3 per cent) and forecasted growth in 2020 upgraded to 1.4 per cent (from 1.3 per cent), allowed the Chancellor to provide additional spending on the NHS and public services. However, if UK economic growth remains subdued, he will need to ensure that additional measures are in place to drive productivity and growth.

Fundamental to that is increasing business confidence in the economy and looking beyond Brexit, as uncertainty over future trading conditions continues to act as a brake on business investment in both the manufacturing and services sectors.

Whilst there is much to be applauded in the Budget therefore, it is crucial that we continue to lobby the government on what really matters to business outside the Westminster bubble.

One example is access to finance, which remains a key impediment to business growth according to surveys undertaken by the British Chambers of Commerce and other business groups. Last month I joined representatives from MSIF and the Local Enterprise Partnership at a roundtable workshop to develop the policy position with the Finance & Leasing Association and Association of Certified Chartered Accountants.

An interim report has now been submitted to the government detailing policy priorities for businesses seeking access to finance and the report can be read here.

The key recommendations include enabling better resourcing and coordination of support mechanisms for signposting SMEs to finance and for the government to adopt a more proportionate and holistic approach to regulation affecting small business and those who fund them.

Let’s hope the Chancellor is still in the mood for listening!

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