This is the time that we assign our business priorities for the year ahead.
Last year was particularly difficult for businesses throughout the UK, and conditions have not materially improved, with consumer spending depressed and international growth slowing. Economic growth should be the main objective for the Government in 2013.
Reducing our deficit is the right thing to do and we support the Government’s continued efforts in this regard. However, the Coalition must ensure that steps are taken to avoid the real risk of a triple-dip recession in the next several months.
Growth in 2012 was anaemic and (although there was much bluster about the impact of extra bank holidays, the weather, the eurozone crisis and any number of other external factors) it is evident that there are long-term structural weaknesses affecting the UK economy.
Ahead of his Autumn Statement last year, we wrote to Chancellor George Osborne urging him to consider interventions in three key areas – exports, skills and infrastructure – in order to spark economic growth.
While we welcome the fact that the Autumn Statement included some help for exporters through increased UKTI funding and that additional investment in skills through colleges and schools were also included, we believe still more can be done, and for that reason exports, infrastructure and skills continue to dominate our priorities for 2013.
Our “top 10” list also includes other measures which we believe could help boost UK businesses and enable them to drive our return to positive and consistent economic growth.
l Action and urgency – At the top of our wish list for the forthcoming year would be a change in attitude from Government, the Opposition and local decision makers. It is disheartening to see delays with the progress of Bills announced in the Autumn Statement 2011 and in the March Budget 2012 due to arduous and time-consuming bureaucracy and frustrating parliamentary processes. It is essential that more urgency should be injected into Westminster. Announcements and rhetoric are not enough, the country needs action, fast.
l Support for exports – The Government has announced a 25% increase in UKTI funding from 2014 (although this follows significant reductions to their budget in recent years). We believe they should have gone much further, because exporting is difficult at the best of times and current global conditions make the process considerably more challenging. Significant, targeted tax incentives must provide greater rewards for exporters and costly Air Passenger Duty should be abated for overseas sales initiatives so that existing and potential exporters are rewarded rather than penalised for bringing home orders from abroad. Further investment in UKTI, in chambers of commerce and in other export support organisations will play an important part in helping exporters to succeed in new and developing world markets.
l Infrastructure investment – A recent study (by IPPR North, December, 2011) found that infrastructure investment of £2,731 per head in London compares to only £201 per head in Yorkshire and Humber. This is totally unacceptable and serves to illustrate the massive priority which continues to be ascribed to funding developments in the South East of the country. Successive Governments have failed to narrow the North-South Divide – and year on year this gap continues to widen. Serious investment in our region’s infrastructure is now essential, and would provide a real boost to the local economy, with positive knock-on effects on employment and supply chains.
l Skills – Long-term unemployment among Britain’s youth is a growing and worrying trend which presents significant threats to our future competitiveness. UK companies in all sectors will increasingly require a highly skilled workforce and there is a danger that there will not be a pool of job-ready candidates in the medium-term future. At a local level we must engage our young people wherever possible in the world of business and work, and schools must show real determination to ensure all school-leavers have basic skills in numeracy and literacy.
l A solution to the access to finance issue – Many small businesses continue to experience difficulties in accessing affordable finance, and this remains a serious obstacle to growth. The Government’s announcement of a new ‘Business Bank’ is positive, but it was disappointing that no further details of this initiative were included in the Autumn Statement and that there is no clear timetable for the bank to be set up. The Government needs to seize the initiative and set the bank up at the earliest opportunity – and with the necessary resources to make a real difference.
l The red tape challenge – is a welcome initiative aimed at reducing the impact of regulation for British business, but so far its effects have been minimal and very much more needs to be done. Compliance with bureaucracy is time-consuming and costly, and the situation is exacerbated by the inconsistency of much of our business legislation. Stemming the flow of regulation from Brussels and renewing the commitment to produce a significant reduction in domestic red-tape would go some way to freeing business to concentrate on what they do best, creating wealth, growth in the economy, and employment.
l An end to business bashing – There has recently been a trend among media figures and politicians to blame the business community for much of the country’s ills. In the year ahead, we urge our politicians to resist this temptation and instead celebrate the great contribution made by the business community to the quality of life in this country. This year the British Chambers of Commerce has been spearheading a campaign entitled “Business Is Good for Britain”, which highlights the vital role played by businesses in communities and the wider economy in the UK. This campaign will continue through 2013 and our chamber will continue to champion good news stories about businesses in our region.
l Locally-led growth – We welcome the proposals outlined in Lord Heseltine’s Growth Review to give greater powers to local areas so they can determine their own economic strategies. Decentralisation of infrastructure decision-making will allow local areas to invest in priority projects and direct spending to boost local economic growth. The Government should give this review full consideration at the earliest opportunity and announce their intentions regarding the implementation of all or part of Lord Heseltine’s recommendations.
l Consistency – Businesses need consistency from Government. It is essential for businesses to have confidence in order to invest and grow – and such business confidence demands a more stable and reliable economic environment so that businesses can rely upon Government policies - with commitments from Government that initiatives will be followed through and policy changes will not be delayed, deferred or reversed at the drop of a hat.
l A strong finish from Town – We hope that Town will consolidate themselves securely as a Championship team and in due course challenge for a place in the Premier League. We can’t lobby Government for this, but we can give our enthusiastic support – maybe 2013 will herald the start of something good!