First and foremost, the Chancellor’s statement delivered plenty of reasons to be optimistic. GDP growth predictions have again been revised upward, with consumer and Government spending now expected to push growth to 6.5 per cent this year.
The feared post-Covid unemployment spike has been revised downwards, while public borrowing and debt are lower than expected too. In economic terms, scarring from the pandemic is no longer expected to be as bad as initial predictions had warned.
And in unveiling his Budget, the Chancellor gave a clear signal that Government is willing to listen to business – something I know will be welcomed by firms across Yorkshire and the Humber. Businesses have long seen rates reform as a key enabler of both an accelerated recovery and longer-term growth. And firms got a taste of what they wanted, as the Chancellor made real strides towards making the system more palatable, for the shorter term at least.
The change from five-yearly to three-yearly revaluations and freezing the business rates multiplier from increases with inflation, will both be welcomed. Extended support for firms in the beleaguered retail, hospitality and leisure sectors and new measures to help businesses advance their decarbonisation ambitions are significant positives too.
But while these are all steps in the right direction, the truth is they don’t shift the needle far enough. The need remains for a more wholesale reform which further reduces the burden for businesses.
The Chancellor also made valuable pledges on innovation and skills which can unlock new opportunities in our region’s economy. On innovation, the commitment to reach £22bn in public investment – albeit with the timescales pushed to the right – is good news for business, as is a modernisation of R&D tax credits in line with CBI calls to include data and cloud computing costs.
And on skills, businesses will welcome the pledge to quadruple places on Skills Bootcamps as a faster, more agile method of training, particularly in areas of shortage. Further funding for the expansion of T-levels can provide new pathways from education to work and help iron out wrinkles in Yorkshire’s skills landscape.
These commitments show that Government has listened and is willing to act in the interests of UK business. Yet for all of the positives, there remains a sense of missed opportunity. A view that bolder policies to stimulate investment – both domestic and overseas – could have accelerated our recovery and set a stronger trajectory for growth.
Instead, businesses remain locked in a high-tax, low-productivity economy with concerns about inflation. That is why the CBI will continue to work with Government to drive change in key areas.
The fight for business rates reform is not over. Progress has been made, but a wholesale rethink is still needed to free enterprise from the financial shackles which so often stymie companies’ investment ambitions.
And while strategy announcements around decarbonisation, delivered ahead of the Budget, outlined the pathway to net zero, the overall scale of public investment falls short of international competitors. We must not let the UK fall behind on this crucial issue.
All in all, this Budget alone is not enough to transform the UK economy for a post-Brexit, post-Covid world. Birthing the high-growth, high-wage and high-productivity economy we all want needs further action – but the important steps taken last week will build optimism that Government is willing to work with business to get us to that destination.