IoD press release  Still no plan for growth in the Spring Forecast

“The Spring Forecast achieved half of its objectives. No policy speculation and no new tax announcements will definitely be welcomed by business leaders. But public spending has been raised further, and there’s an assessment of the fiscal rules, despite previous commitments. Half of a welcome improvement in fiscal headroom is spent on SEND and local authority budgets, amidst warnings from the OBR that future increases in the tax burden risk competitiveness and growth. Meanwhile that improvement in headroom – delivered through equity market over-performance – could be wiped out by recent global developments.

“Two key areas stand out from today’s OBR report: the negative impact on growth coming through from past policies, and warnings of further risks to growth down the line. Projected growth has been lowered in the short-term as the impact on the labour market and confidence from chaotic policy management, and increased employment costs, weigh more heavily than anticipated. Inflation only comes down quicker in the forecast due to a weaker economy. How businesses manage the significant cost increases with which they are grappling is highlighted as a risk. Progress on planning reform stands to be reassessed in the Autumn – the biggest area where government policy has been assessed as growth-positive.  And recent developments in the Middle East are not in the central forecast.

“The UK’s growth outlook is increasingly fragile and risks are only growing. Bolder and swifter action is needed to remove blockers to growth from the planning system, address damage done to the labour market, and bring down costs for business.”