Now more than ever, the United Kingdom needs clear leadership from the Chancellor and the Government. Our country is at a crossroads and the decisions we make now will determine our economic prosperity for generations.
With sluggish growth and Brexit uncertainty, the upcoming Budget Statement must be used to give confidence to businesses, investors and families.
Last week, I sent a letter to the Chancellor outlining the key areas the Government should be addressing. As stated in the letter, there are a number of measures that could be utilised to ensure we begin building a more confident, and ultimately more resilient, economy.
Maintaining a Commitment to a Budget Surplus
During this year’s General Election campaign, the Conservatives committed to eliminate the deficit by 2025. This is important because it provides the starting point from which to build a long-term strategy. Policy can then be devised around meeting that target.
Our debt is currently at its highest level since the aftermath of the Second World War and is expected to grow to £2 trillion in the next five years. At a time when public services are already being squeezed, this is unsustainable.
Only once we have eliminated the deficit will we be able to begin paying down the debt.
Our current tax code is bloated and complicated. It is burdensome for businesses and suppresses growth. A gradual simplification would be welcome, giving businesses time to adapt.
It is also worth remembering that implementing new tax policy tends to add administrative layers for business. The Chancellor must resist the temptation to make changes that will impose additional heavy bureaucracy at such a fragile time.
Encouraging Investment in Innovation
Businesses are reluctant to invest, due to continuing uncertainty, and are sitting on large reserves of cash. Investment is crucial for technology, training and development, but will only be released if businesses are given good reason to do so.
Some of our SMEs also lack the cash that is needed up-front to invest in new and pioneering products. Government will need to step in and assist in giving these smaller firms a boost.
In a post-Brexit world, remaining competitive will mean an ability to produce world-leading products and export them globally.
In any event, businesses will have to adapt to new regulatory frameworks after Brexit and must be supported in making a smooth transition. They also face wider and more immediate challenges in addressing the gender pay gap and adhering to the General Data Protection Regulation (GDPR), which will apply in the UK from May 2018. Businesses must be assisted in meeting these requirements.
These are all crucial points of focus in order to drive growth and secure a more prosperous future for our children.
We face some tough choices, but must be bold, ambitious and flexible as our country embarks on a historic new chapter.
You can read more about our views and analysis on the upcoming Budget on our Autumn Budget 2017 homepage.