The economy cannot wait

This Op Ed featured in The Telegraph on Saturday, from BCC (British Chambers of Commerce) president, Baroness Ruby McGregor Smith. Business West is part of BCC and our local Quarterly Economic Survey reinforces the need to focus on the economy. Business West’s survey found that business concern about inflation is at the highest level recorded since this question was introduced in 2008. You can read the full report here. 

As I witnessed the astonishing scenes playing out in Westminster this week, I knew business leaders across the UK would have been watching from behind their hands. 

Whatever their political persuasion their hearts will have sunk with the realisation we are now saddled with a lame-duck Government which cannot take the big decisions our economy needs. 

Recent data from the British Chambers of Commerce Quarterly Economic Survey makes clear that every single business sector is facing a bleak outlook. 

Two thirds of firms expect to raise prices, while three quarters have no plans to increase investment. Business confidence on turnover and profits are on a downward trend. 

Over eight-in-ten companies are worried about rising inflation and the soaring cost of energy bills is cited as a top factor in driving prices higher. 

Yet we now face weeks, if not months, of paralysis, waiting for a new Prime Minister to emerge and then set about deciding their policies. 

This uncertainty on what the future holds and the direction the Government will further damage business confidence. Businesses need certainty. And more than that, they need to see strong fiscal policy and a long-term strategy for getting us back to economic growth.  

But our economy is forecast to start shrinking before the end of the year, latest GDP figures show worrying signs of falling output and we have a Government unable to take the big bold decisions needed to combat domestic and global challenges.  

Business owners got through the pandemic using their ingenuity, taking tough decisions, and holding their nerve. Now in the face of difficult economic conditions, they have continued to show their entrepreneurial spirit. 

Innovating, finding solutions, looking forward, and always holding on to an unshakeable belief in their own business, even as they lose faith in the environment around them. 

While politicians do battle for the top job, we must also see action from the new interim Cabinet so that plans which were already progressing will not be allowed to fall by the wayside. 

Announcements on the future of Local Skills Improvement Plans to help address skilled labour shortages, the allocation of the Shared Prosperity Fund, and decisions on the future of the Super-Deduction scheme and other tax breaks must all go ahead. 

Work must also continue to progress the Export Strategy at the Department for International Trade and the Enterprise Strategy at BEIS. 

A long-promised review of the Shortage Occupation List must get underway as soon as possible. The 1.3 million vacancies in our workforce are a huge drag on UK productivity and many of these gaps can only be filled by overseas labour in the short-term. 

If the caretaker Government can demonstrate it is able to keep the train on the tracks and fire stoked in the engine, then businesses will at least be given some heart that all is not lost. 

But this is just a starter for 10. Whoever is chosen as the next Prime Minister must immediately set out their plans for a comprehensive strategy to support UK businesses and the economy through the difficult times ahead. 

For too many months there has been a lack of strategic direction, too many opportunities have been missed, and too many decisions have been taken in isolation without looking at the bigger picture. We have limited time. 

The autumn budget must be the main priority of any new Prime Minister and Chancellor - a chance for them to reset, rethink and get their house in order.   

They must display a clear willingness to work in partnership with businesses, to reduce the tax burden on business – particularly those that add to the up-front costs - and to develop a long-term, economic strategy for sustainable growth.   

This is the best way to bring money back into the Exchequer, to pay for our NHS, our schools, the UK’s defence and to build resilient communities. 

Time is running out. There can be no delay once the new Prime Minister is in place, they must demonstrate to business communities that the economy and our future prosperity is their number one focus.