Impact for SMEs
Although businesses welcome the emphasis on reining in inflation and advancing economic growth, concerns over what to expect in the upcoming Autumn Statement and the general elections have been voiced.
“With a general election within the next 12 months looking increasingly likely, the priority for business is ensuring that the economy isn’t put on the back burner,” warns John Foster, CBI Chief Policy and Campaigns Officer.
“But the critical moment will be when the Chancellor delivers the Autumn Statement in just over two weeks’ time, where action to unlock business investment, deliver an internationally competitive business environment and seize high growth opportunities can help ignore the economy,” he stresses.
The CBI is calling for the government to unlock business investment by extending full capital expensing beyond the current three year window.
According to the organisation, this policy could deliver a permanent boost of 21% to business investment and increase GDP by up to 2% by 2030.
On a more pessimistic note, the British Chambers of Commerce (BCC) understood the King’s Speech more as a missed opportunity.
“The King’s Speech opened with an aspiration to increase economic growth – but it failed to outline how that will happen,” points out Alex Veitch, Director of Policy and Insight at BCC.
“It is disappointing that the King’s Speech didn’t include further planning reform in England,” he elaborates. “We continue to call for a faster and more efficient system that enables business to grow.”
Veitch also points out that even prior to the King’s speech, the Government hasn’t shown proof of enough effort to help the business community during challenging times. Moving forward, the BCC would like the Autumn Statement to outline clear initiatives to help businesses grow.
According to research from the BCC’s Insight Unit, over the last quarter only 23% of businesses were increasing investment whilst concern over the impact of high interest rates is growing, reaching 45%.
Despite the scepticism voiced by the business community, the BCC welcomed the focus on increasing high quality apprenticeships.
“The skills crisis is one of the main issues impacting business,” notes Veitch.