Northern Powerhouse Ambassador, Institute of Directors
In its 2020 Budget submissions to the Government the IoD says that the Chancellor’s address is a ‘critical and opportune moment to provide support to turbocharge investment and productivity growth’. It will be interesting to see whether the Government is listening to the IoD and to business in general.
It is fair to say that the views expressed by many businesses regarding Brexit appear to have caused some irritation in Government circles. It needs to be understood that concerns expressed by businesses were not based on a political preference but on an understandable preference for a stable and predictable environment in which to make business decisions.
Business is not looking backwards. Indeed, the IoD’s submission notes that business leaders enter 2020 with optimism, based on the Government’s increased majority ensuring greater certainty for the trajectory of our exit from the EU.
Many business ‘remainers’ are moving on, now the decision is taken, welcoming the ability to plan, knowing that at least ‘in/out’ uncertainty has been removed and seeing the clear direction of travel of the new Conservative administration.
The regular Policy Voice survey of IoD members shows that investment intentions, having been at best lukewarm since the Brexit referendum in 2016, have soared from negative 5% in Autumn 2019, their lowest point in that period, to positive 20% in January 2020.
IoD members now see preparing and supporting businesses through Brexit as the most important priority in the Budget and for Government generally, ahead of the perennial concerns around skills and training.
It is not good enough for Government to say businesses have had more than three years to prepare for Brexit when it hasn’t been certain that Brexit was going to happen or, if it did, what kind of a Brexit it would be.
The next most important issue for IoD members of late are incentives for new businesses and the IoD has long campaigned for the extension and simplification of the existing Enterprise Investment Scheme Reliefs, which have been a major stimulus to investment in early stage businesses, often technology enabled, with high growth potential.
The IoD is also calling for the extension of the higher £1 million annual investment allowances beyond 2020 and for improvements to the UK’s capital allowances regime, which compares unfavourably to that in many other jurisdictions.
The UK’s poor productivity remains a concern and the IoD is calling for a new tax incentive for SMEs investing in productivity enhancing technology.
Finally, the IoD urges a major focus on infrastructure and regional productivity. The IoD suggests Government should focus on quick ‘shovel ready’ wins by developing local road and rail routes. A majority of IoD members think improvements in existing infrastructure would be a priority for their local industrial strategy. The IoD continues to argue that larger investment should focus on accelerating projects that improve East-West connectivity between the major cities in the Midlands and the North.
The IoD has a commitment in its Royal Charter ‘to foster a climate favourable to entrepreneurialism and wealth creation’. It will continue to engage with Government and work to deliver on that objective.
The Budget is a major opportunity for Government to show it is working with business and to provide the direction, stimulus and support that businesses and the wider economy need at this point. We await it with interest.