Institute of Economic Affairs
Mark Littlewood, Director General:
“The Chancellor has basically promised us “a little bit of jam tomorrow” in his Spring statement. The budget deficit is falling a little faster than expected, which is welcome. But he is likely to use some of this £4 billion bonus to simply increase state spending in the Autumn. Disappointingly, he didn’t signal any meaningful aspiration to cut taxes even if he has the room to do so.
“The forecast for growth this year has been turned up by a tiny notch, but this should not be allowed to distract from the vital objective of getting public finances under control and returning to balanced budgets. By easing off on this target, the Chancellor has all but guaranteed that we are destined to experience a quarter of a century of budget deficits, with increased debt being passed on to future generations as a result.”
John O’Connell, Chief Executive:
“The chancellor is to be commended for resisting irresponsible calls from across the political spectrum to turn on the spending taps for the time being, but he must continue to do so at the budget later this year. It’s also encouraging that he managed to resist the temptation to mess around with the tax system and throw money we don’t have at vanity projects and interest groups as most of his predecessors have.
There were lots of warm words about job creators and taxpayers in this statement, but if the chancellor is to beat the forecasts as he made clear he wants to, his rhetoric needs to be followed by actions. The country needs tax cuts and pro-growth policies, not reheated spending gimmicks and a consultation on plastic taxes.”
Institute of Directors
Tej Parikh, Senior Economist:
“The Chancellor was right to stick to his guns and avoid too much tinkering today. Businesses have had to deal with plenty of new costs over the last few years, including the apprenticeship levy, immigration skills charge and pensions auto-enrolment, so they will be relieved to see a no-frills statement. This was an upbeat and pro-business speech. IoD members will be pleased to see that growth is currently beating the forecasts and the deficit is falling.
“Better short-term economic figures will reassure business leaders that there is underlying resilience in the UK economy, but the Chancellor was also right to point to the long-term productivity challenge. The OBR continued to be downbeat on productivity growth, with recent increases largely driven by a fall in hours worked, rather than a pick-up in output. As such, the Government must continue to push forward with its proposals in November’s Industrial Strategy and make clearer to businesses how it will bolster skills, infrastructure, and innovation.”
Federation of Small Businesses
Mike Cherry, National Chairman:
“The Chancellor is absolutely right to commit the government to eliminate the scourge of late payments, which place cruel financial pressure on more than eight out of ten small businesses. The poor treatment of smaller suppliers by many bigger companies is both unacceptable and holds back growth and productivity.
“It also poses a danger to supply chains, as the fallout from Carillion’s collapse showed. Philip Hammond’s words must now be followed by real action.
“The Chancellor explicitly put himself on the side of the UK’s millions of small businesses and self-employed. It is important that other measures are not implemented in a way which would undermine that.
“FSB called for more regular Business Rates revaluations, but they must be achieved without putting extra administrative burdens on small firms, such as self-assessments. Crucially, this change does not obviate the need for fundamental reform of a tax that bears no relation to the ability to pay.”
Leave Means Leave
Richard Tice, Co-Chair:
“The figures set out by the Chancellor today show that Britain has been thriving since the vote to leave the EU. The economy has grown and forecasts have been positively revised once again. The Chancellor is right to be positive – Brexit offers a whole host of economic opportunities that will help to beat the forecasts he set out today.”
“The Government should now look to invest in ensuring that Britain is prepared to leave the EU next March, so that all mechanisms are ready for a clean swift break.”
Confederation of British Industry
Rain Newton-Smith, Chief Economist:
“The Chancellor is rightly backing British business to secure the UK’s future prosperity in a new economy. It’s great to see an upgrade in the state of our public finances and rightly sensible to set more aside for a rainy day with Brexit uncertainty still weighing on the economy. The global economy is going from strength-to-strength, but at the same time economic growth here at home remains lukewarm. This underlines just how vital it is to secure a Brexit that delivers for jobs and an industrial strategy that helps transform UK productivity in all corners of the country.”
“Businesses and workers must move now to adapt their skill-sets to the modern economy. Upskilling existing workers and preparing young people properly for the world of work is fundamental to the technology revolution. The lack of flexibility in the Apprenticeship Levy is a core concern to many firms, so it was disappointing to miss this opportunity to tackle this issue head on. The CBI looks forward to working with the TUC and government on the National Retraining Partnership, where we aim to help develop the workforce of the future and meet the needs of local labour markets. Add in a reformed apprenticeship levy with a strong careers strategy, and the UK can finally have a skills system to be proud of.”
“The UK cannot move on taxation in the digital age in isolation, so the Chancellor is spot on to work in lock-step with the international community to develop an approach that crosses borders and sectors. The CBI has long-called for just one Budget in a year, creating more room for Government and business to get to work. But the Spring Statement is still important, and this one has proved more than welcome in setting the tone and vision for the country’s economic future.”