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IoD responds to the Spending Review

25 Nov 2020

westminster

Responding to the Chancellor’s Spending Review statement, Jonathan Geldart, Director General of the Institute of Directors, said:

“Today’s statement provided a sobering view of the challenge ahead, and funding for infrastructure and skills will be crucial to meeting that challenge.

“Just as significant was what the Chancellor didn’t announce. Business leaders will be relieved that the Treasury is resisting the temptation to hike taxes on enterprise for now, but will be concerned that Brexit didn’t merit a mention.”

On the announcement of an infrastructure bank and National Infrastructure Strategy, Jonathan said:

“IoD members see infrastructure investment as the top priority for our economic recovery. A long-term plan for upgrading broadband and transport, backed by a new national Infrastructure Bank, will provide a significant boost for business confidence.

“With widespread uncertainty at the moment, clear Government strategy and commitments are crucial encouragement for directors' plans for their own organisations. As ever, the acid test will be how quickly and effectively this funding reaches the ground. Transparency, good governance and a focus on the Net Zero target will be key for both the new Bank and the Levelling Up Fund.”

On the Restart Scheme, Jonathan said:

“The Restart Scheme is undoubtedly a welcome measure, but it only addresses one half of the challenge. To counter the rise in unemployment, the Treasury also needs to boost job creation, and it missed a trick by not combining the Scheme with a cut to Employers’ National Insurance Contributions.

“While the economy will receive a boost when vaccines materialise, the Chancellor should be wary of relying on this completely. Directors look to make their hiring plans in advance, so improved prospects might not immediately translate to the jobs market, particularly as many companies will have to deal with a debt hangover before looking to expand."

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