Jeremy Hunt last week called on businesses to invest in the UK and promised long-term thinking to make the UK the next Silicon Valley.
He outlined his vision to get the UK’s economy back on track on Friday (27 January) and said driving business growth is one of the government’s five priorities. The other four priorities include encouraging enterprise, tackling poor productivity, and getting more people into better-paid jobs right across the country.
He said digital technology, green industries, and life sciences are among those identified as growth sectors that can help realise a more innovative economy.
“Our plan for this year remains to halve inflation, grow the economy and get debt falling,” he said.
“But all three are essential building blocks for much bigger ambitions for the years beyond.”
The Chancellor set out his aim to increase enterprise, supporting businesses by using our new-found Brexit freedoms to review regulations in key growth sectors to make it easier for companies to innovate alongside the importance of competitive business taxation.
He reiterated the importance of employment and tackling economic inactivity, helping more people into work and filling the vacancies in the jobs market. He also outlined ambitions to help more disabled people and those with mental illnesses into work and a pensions system that encourages continued workforce participation. The Work and Pensions Secretary is thoroughly reviewing issues holding back workforce participation with a report due to conclude shortly.
Shevaun Haviland, director general of the BCC, said the Chancellor is right to be optimistic for the future of British businesses that are desperate to grow and prosper.
“Our Chamber Network is jam-packed with innovative and forward-looking firms. They are developing new products and services that can sustain our economy for years to come,” she said.
“But beyond pledges to introduce Investment Zones and to use reform of Solvency II to unlock capital there was very little meat on the bones of the Chancellor’s vision.
“Crucially he missed out two Es when he detailed his focus on ‘enterprise, education, employment and everywhere’. Without addressing the issues of energy and exports, our economic growth will continue to be stunted.
“While wholesale energy charges might now be starting to fall, the reality is that thousands of businesses were locked into new contracts last year at prices that will remain far higher for months to come. This will be unsustainable for many and must be addressed.
“It is also very disappointing that he did not mention exports at all. Government must help businesses to harness the opportunities provided by existing free trade agreements, and those coming on stream.
“Vision is important, but the mechanics of delivery matter too. The Chancellor should make full use of our 53-strong Chamber Network, which is plugged into local economies across the UK, and 79 international affiliated members to help deliver growth through exports.
“The four Es is a start, but we moved no further forward this morning. We urge the Chancellor to read the BCC’s business manifesto for realistic polices to help get back to growth.”
The Chancellor went on to call on businesses in the key growth sectors of digital technology, green industries, life sciences, advanced manufacturing, and creative industries to increase their investment in the UK.
“If anyone is thinking of starting or investing in an innovation or technology-centred business, I want them to do it in the UK,” he said.
“I want the world’s tech entrepreneurs, life science innovators, and clean energy companies to come to the UK because it offers the best possible place to make their vision happen.
“And if you do, we will put at your service not just British ingenuity — but British universities to fuel your innovation, Britain’s financial sector to fund it and a British government that will back you to the hilt.”
Federation of Small Businesses’ chief of external affairs, Craig Beaumont, said while the contents of the Chancellor’s speech had all the right elements to build a successful, prosperous economy, the proof will be in the pudding in the years ahead.
“His personal drive is clear. It was helpful to speak to the Chancellor after the speech on how to take this forward,” he said.
“As a former small business owner himself, it was encouraging to hear him talk about his own, personal experiences with enterprise and innovation. But policy decisions now must match his new four-pillar framework. We’ve got to boost growth and productivity.
“First up must be to change the recent decisions to gut the SME R&D scheme due to too much take-up, where we need a new way forward. The abolition of Help to Grow Digital due to too little take-up means we need new ideas — such as our Help to Green proposals that boost investment and net zero.
“The Government must now turn its efforts into getting more people into employment through a Kickstart scheme. It should also set a target to grow the number of disabled entrepreneurs by 100,000 by 2025, because a disability entrepreneurship gap exists, and they should act to help close it. The self-employed should also be given the right help to expand their business.
“The litmus test of his framework and the policy decisions that now flow will be on the Chancellor’s budget on March 15.”
