Future projections shape important decisions, from new product launches and cash flows to staff recruitment and capital investment. When the path ahead is unclear, business confidence and ambition fades, and firms stagnate – or worse.
That is why the Government’s roadmap announcement will be broadly welcomed by most of our region’s businesses. Yes, firms operating in some stricken sectors will have hoped to see a swifter timetable for the relaxation of restrictions. But saving lives and ending the stop-start lockdown cycle must be the priorities.
Given previous events, a cautious unlocking is prudent. Crucially, it gives businesses some clear dates to work towards as they plot their own journeys back to the ‘new normal’.
A timetable is only half of the story, though – and companies across Yorkshire and the Humber now need Rishi Sunak’s Budget to be the second half to this story. The roadmap sets out where we want to go, but it is the Budget which will determine what shape business will be in when we get there.
Businesses will be looking for three things: protection from the impact of the time which remains in lockdown; investment incentives which can fast-track their recovery; and a long-term vision of sustainable and equitable economic growth.
Support is the first priority for many businesses and sectors which remain in emergency mode with cashflows tight and operations restricted. The Government’s Covid business support measures have been significant, but now is not the time to bring them to a shuddering halt – particularly for those sectors that still have a way to go.
The job retention scheme, business rates holidays and VAT deferrals all need extending at least while restriction remain in place, and successors to the government-backed loan schemes remain much-needed.
And yet it cannot be a Budget of pure firefighting. If we are to regain the substantial economic ground lost over the last year, the Chancellor needs to get firms investing where they can and fast.
One of the biggest priorities is to finally reform the current business rates system, which is uncompetitive, unproductive and unfair – it helps ingrain the UK’s huge regional inequalities.
Firms will be disappointed that the review has been pushed back to the autumn, but delay must not also mean inaction. The Chancellor could unlock more investment by exempting physical ‘green investments’ like solar panels and heat pumps from rates. He could also delay rises in rate bills for firms making their buildings more energy efficient.
On net-zero more widely, the CBI has called for action on climate change, to make investing in green growth the easy choice. A focus on the shift to zero emission vehicles, fresh jobs in clean industries, a review of fuel duty taxes. All can play a part.
We need to get firms spending on the innovations of tomorrow and help SMEs catch up with the technologies of today. So a new R&D tax credit for capital investments is in order, alongside an ‘Invest to Grow’ scheme which incentivises SMEs to adopt digital technologies. This could prove transformational in the long run and lock in the digital acceleration of the year gone by.
There must also be recognition changing business needs. Dropping the Apprenticeship Levy in favour of a flexible Skills and Training Levy, and transforming Job Centres into Jobs and Skills Hubs, can create new opportunities for people in every corner of the country.
The final component should be a long-term focus. The UK needs an economic vision that looks ten years ahead, not just next year or to the end of this Parliament. It needs long-term thinking, national unity and consensus. After a global pandemic and beginning the journey outside of the EU, if not now, then when?
At the Budget therefore, the Chancellor must finish what he started – doing whatever it takes to back UK business. The more businesses – the more jobs – that we can see through the crisis, the faster we can snap the economy back into shape, investing to make our economy greener, fairer and more dynamic.