Today (Tuesday, 13th March 2018), Chancellor Philip Hammond has unveiled upgraded growth plans and forecasts in his Spring Statement.
Reacting to the news, we have compiled a round up of statements from the Welsh business community below.
Institute of Directors, Wales
Responding to today’s Spring Statement, Robert Lloyd Griffiths, Director of the Institute of Directors in Wales, said:
“The Chancellor was right to stick to his guns and avoid too much tinkering today. Businesses have had to deal with plenty of new costs over the last few years, including the apprenticeship levy, immigration skills charge and pensions auto-enrolment, so they will be relieved to see a no-frills statement. This was an upbeat and pro-business speech. IoD members will be pleased to see that growth is currently beating the forecasts and the deficit is falling.
“Better short-term economic figures will reassure business leaders that there is underlying resilience in the UK economy, but the Chancellor was also right to point to the long-term productivity challenge. The OBR continued to be downbeat on productivity growth, with recent increases largely driven by a fall in hours worked, rather than a pick-up in output. As such, the Government must continue to push forward with its proposals in November’s Industrial Strategy and make clearer to businesses how it will bolster skills, infrastructure, and innovation.”
Commenting on today’s inaugural Spring Statement announcement, Lewis Fawsitt, Corporate Sales Director said for Acorn Recruitment said:
“Before the new look Spring Statement the Chancellor was at pains to emphasise that this was not going to be a ‘mini-budget’ as it has been in the past, but more an update on the state of the nation’s finances.
“We were faced with an upbeat Philip Hammond – but despite describing himself as ‘Tigger-like’, I’m not sure there was enough bounce in this update.
“News of the soon-to-be increased National Living Wage and tax allowance will certainly be welcome to some – and one hopes very much that this will have an impact in real terms on people’s pockets and in consumer spend.
“Certainly, figures do indicate that the economy is growing faster than previously forecast but here in the UK we still have plenty of catching up to do as the over the past year the UK reported the lowest GDP growth rate among the G7 group and major advanced economies.
“There was also no mention of the Swansea Bay Tidal Lagoon, which remains a particular disappointment. The more time that passes, the more concerning it appears for this innovative South Wales project.”
ACCA Cymru Wales
In response to the Chancellor of the Exchequer’s Spring Statement today Lloyd Powell Head of ACCA Cymru Wales the Association of Chartered Certified Accountants), says:
‘While the refusal to treat the statement as a mini-Budget has many benefits, the climate of uncertainty requires some bold economic policy. It was disappointing that Philip Hammond missed the opportunity to bring forward increases in the personal allowance and basic rate band, to pass on savings to stretched taxpayers.
‘It might be time for government to look towards an NHS tax. Gordon Brown’s attempts to use NICs increases for similar funding only further complicated the system. Yet to avoid the mistakes of the past, government should consider full hypothecation: with robust ring-fencing and transparency on how the revenue is being spent.
‘At the same time, government should exercise careful judgement when it comes to potential tax changes on digital businesses. Measures aimed at tackling perceived tax avoidance by the Big Tech firms could easily impact on much smaller digital firms’ competitiveness and investment. Any effective digital taxation system must be built on a multi-lateral framework and align with the latest OECD work on the digital economy.’
South Wales Chamber of Commerce
Commenting on the Spring Statement, delivered today (Tuesday) by the Chancellor of the Exchequer, Harri Lloyd-Davies, President of the South Wales Chamber of Commerce, said:
“Welsh Businesses will be encouraged by the Chancellor’s report on the UK’s fiscal health, with lower projections for the deficit and falling national debt, as well as his full-throated defence of the market economy and the role of the private sector in delivering prosperity.
“Yet as deficit and debt levels improve, the Chancellor must resist calls to pour money into politically-attractive, short-term spending priorities. Any headroom the Chancellor has must be used to leave a lasting mark on the UK’s infrastructure and to attract investment – particularly with the challenges and changes of Brexit ahead.
“A far stronger push is needed to fund and fix the fundamentals here in the UK over the coming months, and business wants the Chancellor to use his Autumn Budget to double down and spend to improve digital connectivity, deliver further road and rail improvements and strengthen the UK’s energy security. Existing plans alone are not enough.
“Given that businesses have long complained about constant tinkering with tax rates, the Statement’s lack of tax and spending changes is welcome – and not before time. A clear annual cycle will mean fewer rushed policies and give firms the time they need to plan for any changes that come their way.”
On late payment:
“Previous attempts to tackle late payment have not had the desired effect, because affected firms are often unwilling to jeopardise customer relationships by calling out bad practice. The government must use its convening power to tackle this issue in sectors where it is clear that problems exist.
“Changing payment terms mid-contract, and burying payment terms in the small print when suppliers register for business, are issues that deserve ministers’ attention. However, ultimately improving relationships between businesses is a key part in addressing the problem of late payment.”
On the latest forecast by the Office for Budget Responsibility:
“Taken together, the OBR’s latest forecasts suggest that the UK will remain locked onto a low growth trajectory for the foreseeable future. While GDP growth for this year was upgraded slightly, their projections for 2021 and 2022 have been downgraded.
“It is encouraging that government borrowing is now projected to be lower over the next few years than in their previous forecast, and suggests that that chancellor will have some welcome fiscal headroom at the Autumn Budget later this year.
“The OBR’s latest outlook also highlights significant challenges facing the UK economy over the near term. Their projections implies that UK economic growth will remain unbalanced throughout the forecast period with business investment and trade expected to add little to overall UK growth.
“UK productivity is still expected to remain subdued over the next few years, and could weigh more on overall economic activity than the OBR’s GDP growth forecast currently suggests. Productivity continues to be hampered by the deep-rooted problems in our economy, from the skills gap to chronic underinvestment in the UK’s infrastructure.
“The OBR is right to highlight the risk of a disorderly Brexit, as a sudden departure from the EU would be likely to trigger a marked weakening in economic conditions.”
“Against this backdrop, the focus of the Autumn budget must be on delivering a fiscal consolidation plan that achieves a more sustainable balance between deficit reduction and boosting productivity and growth, including using its greater fiscal headroom to deliver urgently needed infrastructure investment.”