Business welcomes commitment to unleash the power of the private sector

Responding to the Chancellor’s statement on the government’s Growth Plan, Kitty Ussher, Chief Economist at the Institute of Directors, said:

“This is a good news day for British business. In a time of low confidence and economic uncertainty, the new Chancellor’s emphasis on going for growth will be very welcome to firms of all sizes across the UK. Taken together with the energy bills relief scheme, the package as whole will make it easier for businesses navigating a challenging economic environment in the coming months.

“The reversal of the hike in employers’ national insurance, which we have campaigned for from the outset, is of particular relief, as is the cancellation of the forthcoming corporation tax increase. We also welcome the decision to simplify IR35 rules, keep the Annual Investment Allowance at £1m, extend the Enterprise Investment Scheme beyond its sunset clause and streamline the planning process for infrastructure projects. The introduction of investment zones, with a lower tax regime including for capital investment is also a welcome innovation, particularly if it channels funding into locations most in need of regeneration.

“However, we are concerned that the Chancellor had not asked the OBR to undertake its usual independent assessment of the impact of its proposals on government debt and the wider macroeconomy. Without this, neither businesses nor parliament have the reassurance that the scale of this intervention is affordable and so does not jeopardise overall economic stability.

“We were also disappointed that the previous Chancellor’s workstream to use the tax system to incentivise workplace training to address skills shortages appears to have been abandoned, and that there was no mention of making capital investment super-deduction permanent or incentivising smaller businesses to play their part in decarbonising the economy.”