Business year in review: the good, the bad and the uncertain by Phil Smith
It’s always difficult making predictions about what the next 12 months will have in store for businesses, and for sure the forecasts for 2016 would have been way off beam! But if one thing’s for certain about 2017: it presages a new era in the UK economy, which will have long lasting implications for the South West - both good, bad and uncertain.
Let’s start with the good.
The UK’s energy supply is finally undergoing a transformation, and, after years in the making, Hinkley Point C was finally approved in September, giving a much needed boost to the construction and engineering industries. What with contracts worth billions up for grabs, to say nothing of the wider economic impact, Hinkley will secure the UK’s energy supply for a generation.
Another leap forward in the long-term future of the South West economy is the apprenticeships levy. While sceptics have, somewhat unfairly in my view, described the levy as a ‘stealth tax’ on those businesses with wage bills totalling over £3m a year, it represents a golden opportunity to enhance and entrench wealth and prosperity in the South West.
Apprenticeships are a springboard to the creation of highly skilled, well paid and rewarding jobs, and in turn to cultivating high-growth, high-value industries in the local area. While the 0.5% levy rate might be a pain point for some, it will have widespread and long lasting impact on promoting inclusive growth across the region.
Now for the bad.
For years and years, Business West has lobbied local and central government to draw attention to the chronic lack of investment in digital and transport infrastructure in the West. We, like London, are the only large cities that make a net contribution to the UK’s total GDP, yet, in spite of this, per capita investment in the region lags significantly behind that of the capital. Deferment of rail electrification in the West is a case in point, illustrating how we’ve been neglected for far too long. This simply has to change, and it is why we campaigned tirelessly throughout 2016 to get the West of England devolution deal agreed.
Without question, a £1bn investment kitty and devolved powers from Westminster are a step in the right direction, however, a large number of unknowns need to be addressed and quickly if devolution is to be a success.
As it stands there is little agreement over how devolution should benefit businesses. We are clear: it is in the best interests of business and society as a whole that transportation and housing are treated as absolute imperatives. No ifs, no buts, they are non-negotiable priorities for the region. To this end, we have been working in consultation with local authorities to develop the Joint Spatial and Transport Plan, which sets out a vision to solve the housing shortage and our crumbling transportation networks. We have the grit and determination to make devolution work for business and we’ll be pushing hard for these in 2017.
This brings me to the elephant in the room, which, of course, is Brexit and the uncertainty it has created.
At the time of writing, it looks certain that the government will press ahead and trigger Article 50 to begin the process of leaving the European Union in March. Now more than ever, it is important that we at Business West continue to help our members prepare for life outside of the EU, and that is why Brexit remains at the top of our agenda for 2017.
Our Policy and Initiative teams are working flat out to ensure that decision makers in local and national government take note and listen to South West businesses before sitting down at the negotiating table in Brussels. Whereas our international trade team are on hand to offer their expertise in guiding businesses through any extra documentation that may be required to trade within the EU in the event of a ‘hard’ Brexit.
It’s safe to say that 2017 will be a busy one.
But enough of the challenges that lie ahead, at the turn of the year I find it is as important to take stock of the one that has just passed and reflect on our successes and triumphs.
With this in mind, special mention must go to Plimsoll Productions and Castle School Trust, who won the ‘High Growth Business of the Year’ and ‘Business and Education partnership’ categories respectively at the British Chamber of Commerce awards.
Two members of ours which not only represent the best of the West but the best of British too!
On a personal note, our newly launched website ranks highly, along with our successful efforts to get businesses exporting – and not just the obvious businesses. We’re helping companies of all shapes and sizes to trade online, which can often lead to overseas sales – a great way to grow a business. I’d like 2017 to be the year that more companies consider exporting for the first time.
As 2016 draws to a close, I’d like to wish all South West businesses a happy and prosperous New Year – I hope that 2017 turns out to be one of your best yet.