It will soon be time for the Government to put its money where its mouth is and prove that the country and its economy can stand up to the stormy weathers ahead on our unchartered journey away from the European Union.
After Sajid Javid threw his toys out of the pram and left 11 Downing Street, it’ll be up to his successor Rishi Sunak to place the battered red briefcase on the dispatch box and pull out a Budget that has to be good for business.
As shown by the UK economy registering zero growth in the fourth quarter of 2019, according to the Office of National Statistics, businesses have been in a zombie state.
Will the ‘Boris bounce’ last?
Clearly, there’s been post-election bounce – which is hardly a surprise when considering how damaging the political uncertainty prior to the December poll was to the economy.
It has also been suggested that there’s been a positive reaction in the economy from Brexit Day, but I would counter that by saying that business owners had simply had enough of it all. They’d waited long enough and knew that it was time to start making the important decisions to deliver growth, sustainability and even survival.
Despite the flag-waving on 31st January, Brexit still isn’t a done deal. The next stage of trade negotiations with the EU and with other countries across the globe will doubtlessly generate more issues and uncertainty.
As is the nature of any bounce, the post-election momentum will inevitably slow. As the old saying goes, what goes up must come down.
All this means that March’s Budget will probably the most important one since George Osborne had to steer the economy through the last recession. The new chancellor must give entrepreneurs the opportunity to create jobs, deliver investment and improve productivity.
The skills system needs a facelift
As I wrote a couple of weeks ago, this includes endeavouring to make this the Budget of vocational training. Priti Patel’s announcement of the points-based immigration system cannot be a one-handed policy. It has to be matched with a complete overhaul of the skills system. Otherwise, there just won’t be the pipeline of skilled people that businesses need to fill the jobs.
It will mean that existing skilled British workers will be at a premium, pushing wages up and making the pool of available talent smaller than ever before.
Fuel duty and tradespeople
I would also urge the chancellor to resist increasing fuel duty, which has been floated through the media recently. We all share the desire to reduce carbon emissions and improve the environment, and transport is a key element.
However, this is putting the cart before the horse – or, more accurately, the electric vehicle before the charger. Until the infrastructure is in place and the vehicles are more readily available, businesses have little choice but to rely on petrol and diesel-fuelled cars, vans and lorries. Improved rail services are fine for commuter journeys, but a tradesperson can’t carry their tools on the tube!
Increasing fuel costs will hit businesses at a time when they need to focus on growth – not additional outgoings.
The chancellor has to seize the opportunity to create a much more pro-business environment where the collective capabilities of the UK’s near-6 million SMEs can be harnessed to turn the wheels of the economy and drive us forward.
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