IoD welcomes end to recent political uncertainty, calls for support for mid-sized firms

Responding to the announcement of Rt Hon Liz Truss MP as the new UK Prime Minister, Jonathan Geldart, Director General of the Institute of Directors, said:

“We warmly welcome the appointment of a new Prime Minister and hope that we can now move on from the recent political uncertainty that has had a real impact on business confidence.  With businesses facing real difficulties and feeling apprehensive about the prospects for the UK macroeconomy, our members have expressed their concern about the lack of a clear direction. Our data shows that one of the main reasons for low business confidence in the UK economy is political instability, second only to inflation.

“We therefore look forward to engaging with the new Prime Minister and her ministerial team at the earliest opportunity to continue to push for the policy priorities that will best encourage and foster a favourable climate for entrepreneurial activity and business growth.

“In particular, with business already facing unprecedented energy and other supply-side costs, we urge the new government to help mid-sized firms in their transition to net zero and reverse the recent hike in employers’ national insurance contributions. Action in both areas would support SMEs trying to grow in very difficult circumstances.

“To grow the economy, we need to raise all types of investment. We are therefore calling on government to also make the 130% capital super-deduction permanent, as well as use the tax regime to address skills shortages.

“If changes to corporation tax are being considered, we urge the government to use it to speed up the transition to a low carbon economy and reduce our dependency on expensive fossil fuels. Specifically, we advocate the creation of a ‘wedge’ between the corporation tax paid by those businesses that are net zero and those that are not. This would provide a clear incentive for all businesses to achieve the desired change and would be a huge stride towards meeting this country’s climate change target.”