Extra Brexit funding a ‘necessary precaution’ but not enough detail for businesses
Responding to the Government’s Spending Round, Tej Parikh, Chief Economist at the Institute of Directors, said:
“The Spending Round saw the Chancellor turn on the taps, but the under-pressure business community still needs more direct support.
“With the elongated period of parliamentary turbulence sapping economic confidence and depressing investment plans, business leaders needed a significant shot in the arm to build their resilience. Funding for education will get high marks from directors, and there are positive signs that the Government wants to get to grips with our lagging regional growth and infrastructure.
“Unfortunately, many firms may still be left wanting an emergency Budget soon, whatever happens with Brexit. One-off reliefs to business rates would support margins in a challenging period, and a moratorium on the implementation of potentially disruptive regulations would help cut down business to-do lists and get directors focusing on adjusting to Brexit and investing in their firms.
“Earmarking departmental spending is a vital exercise, but firms would much rather see longer-term outlines to inform their own investment plans. The accelerated process also afforded little space for businesses to feed in their priorities. Meanwhile, there is concern that, without official forecasts alongside, the money allocated may eat into future funding.”
On the extra funding announced for Brexit preparations, Allie Renison, Head of Europe and Trade Policy, said:
“Despite the turmoil in Parliament, extra funding for Brexit preparations is still very much a necessary precaution. It is for politicians to wrangle over whether no deal is preventable or not, but businesses cannot look at this through rose-tinted lenses.
“While departmental spending is clearly allocated for this, we are disappointed there is still no full detail even on the business readiness funding portion of the £2 billion announced by the Chancellor more than a month ago. Firms are in desperate need of further tangible guidance and financial support to properly plan for every outcome. In Northern Ireland in particular, companies trading across the land border have precious little detail from either government or the EU to work with and many cannot afford to relocate even as a contingency. Without devolved government in place, the Northern Ireland Office and civil servants in Stormont are also in serious need of resource to improve Brexit planning and adjustment – not least to support industry through the changes that may be upon us.
“Unlike politicians, business cannot just wish away the possibility of no deal, it is a real and present risk that requires more information and assistance from the Government beyond just advertising spend.”