In response to the Chancellor’s speech today at the Conservative Party conference, James Sproule, Chief Economist at the Institute of Directors, said:
"The Chancellor hit the right notes today, talking of boosting house-building, investing in technology and innovation and the importance of getting value for money from infrastructure. But soon, businesses will need to see this positive mood music turn into something more concrete. Philip Hammond has between now and the Autumn Statement in November to develop an economic plan that boosts confidence and sees business through the uncertainty of the Brexit negotiations.
"The new approach on house-building, focussing on funding to increase supply, rather than policies that boost demand like ‘Help to Buy’, is welcome. But one of the biggest hurdles to getting the homes we need built is still the planning system. If the Government doesn't tackle planning problems, small builders in particulate will struggle to achieve the Government's aims. On infrastructure, the real test will be whether this administration continuously evaluates major projects like HS2 to make sure the benefits justify the costs, while also delivering smaller road and rail schemes which can be built quickly at lower cost.
"Business is prepared to give the Government some leeway on the deficit. After the referendum, most IoD members agreed with pushing back the target to run a budget surplus by the end of the Parliament. The biggest area missing from this speech was tax. At the Autumn Statement we hope the Chancellor will take bold steps to simplify the tax system for small and medium sized companies, and give all business some clear guidance on what is, and what is not, tax avoidance. If companies know the UK has a straightforward tax system, with competitive rates, it will go a long way towards reassuring investors this will still be a great place to do business after Brexit."