We tuned into the National Spending Review today (25 November) and expected to be informed of changes that would have a tangible impact on businesses.
This wasn’t the case and we’re left asking the question of whether this is just another case of kicking the can down the road.
There had been a widespread expectation that news of tax rises and tax changes would be shared, however there was no mention of these changes – no-one wants to heap misery on despair I guess.
That said, after all the Covid-19 support announcements it is understandable that there’s nothing here for businesses in this Spending Review.
But a commitment to tax rates, or looking again at business rates, would at least have given a glimmer of hope to businesses as they try to recover from the Covid-19 lockdown and a shrinking economy.
The National Infrastructure Strategy is a good boost to economic activity in the regions which is very welcome, but how many major projects can be completed before the end of this parliament?
And the question remains whether there are enough skilled people in construction to deliver on this strategy.
The Restart programme and Kickstart scheme will undoubtedly help, but whether they are able to provide sufficiently skilled people by the time the projects start is yet to be seen.
A major worry is the one year focus, and whilst it’s understandable, it’s impossible to plan anything based on a single year of funding – you can ask any Local Enterprise Partnership in the country about that.
I feel some degree of sympathy for public sector workers – many of whom have dealt with unprecedented volumes of work during the pandemic.
But in reality there are many more private sector workers without jobs, and as Chancellor Rishi Sunak says himself this number is only likely to increase.
Is now really the time to increase the minimum wage again, after so many years of above-inflation increases? How sustainable is this for many businesses and will this also put pressure on unemployment numbers?
Borrowing is expected to reach £394bn for the current fiscal year, or 19% of GDP and that signals the highest recorded level of borrowing since WWII.
The unprecedented low borrowing costs signal a positive, and while we all know the country will have to pay for this support further down the line, the low costs do mean there is greater scope to kickstart the economy after the pandemic.
Stay safe and stay positive!