Autumn Statement must resist urge to cut capital spending: Beckie Hart

This will be an important moment to not just restore confidence with a credible plan to pay back our debts but also set out measures that can get the UK economy growing again.

As we look ahead to November’s autumn statement now under a new Prime Minister and Chancellor, it’s clear market confidence must be restored. Progress has been made on that front, but the Government has to provide a credible plan to reduce debt. We also can’t forget that markets are also keeping a close eye on our growth prospects.

To close the budget deficit, the Government has three levers to pull: cut spending, raise taxes or achieve higher economic growth. But all three must be carefully balanced – neglect growth and the economy will be caught in a doom loop, where low growth leads to more spending cuts and tax rises.

We at the CBI have a clear vision to make sure we get it right in this precarious situation. First, we need to see a clear fiscal rule to make sure we can stabilise debt to GDP by the end of year five. We can’t run the risk of going too far, too fast – or we might stifle growth.

But it’s also crucial to resist the impulse to cut capital spending in order to avoid day-to-day cuts. Thirdly, we have to focus on taxes that help business

investment.

Business rates and other pre-profit taxes are by far the biggest hurdles to investment for many firms across Yorkshire & the Humber. Allowances like the super deduction can make an instant difference, particularly considering the announced increase in corporation tax. And lastly, supply side reforms can’t be discarded – especially at a time when public money available to invest is restricted.

It’s clear that we now have to take advantage of more cost-free growth opportunities available. The most critical roadblocks to growth in the UK right now are labour and skills shortages. Our immediate priority should be to reform our immigration system to get the skills firms in our need to pursue stalled investment plans. In the long term we need a clear and ambitious skills strategy, including reforming the apprenticeship levy, to support firms in staffing critical roles and upskilling workers here in the UK.

We also have to be frontrunners when it comes to net zero, something that we are already working hard towards, so much so that the Humber 2030 Vision prospectus will be launched in Westminster this week, having already been published at the Marketing Humber Waterline Conference in October. Growing our green economy is a massive opportunity. We have the chance to attract investment and support firms in developing renewable technologies, leading the way on decarbonisation and sustainability creating jobs and growth.

There is no doubt in our mind that we can get back to a strong growth trajectory. In our plan for the economy – Seize the Moment – we outline £700bn of prizes available to UK firms. But before firms can grasp these opportunities, we need to see a return to consistent macroeconomic stability. The Government must consolidate confidence and deliver productivity-enhancing reforms. Growth can’t be forgotten – firms across Yorkshire & the Humber depend on it.

Beckie Hart is CBI regional director for Yorkshire and Humber