Chancellor’s summer economic statement: National business reaction

July 8, 2020

The CBI said Chancellor Rishi Sunak was “absolutely right” to prioritise jobs in his summer statement.

Director-general Dame Carolyn Fairbairn, pictured, said: “Flattening the daunting unemployment curve about to hit our country could not be more important. Joblessness scars lives and hits the young and most disadvantaged hardest. 

“The jobs plan is an important step forward. For young people, the Kickstarter Scheme will help create jobs in the short-run that can turn into opportunities for the long-run, and firms look forward to working with government to get it up and running quickly and well. It is also good to see direct support for apprenticeships and careers advice, which will help build the skills as well as the jobs of the future.”

She said the new investment in green growth would spur job creation on the road to net zero, while revitalising demand through targeted VAT cuts for hospitality, an imaginative voucher scheme and stamp duty relief would be warmly welcomed by many businesses and help give consumers confidence to spend.

“But prevention is better than cure. Many viable firms are facing maximum jeopardy right now,” she added.

“The job retention bonus will help firms protect jobs. But with nearly 70% of firms running low on cash, and three in four reporting lack of demand, more immediate direct support for firms, from grants to further business rates relief, is still urgently needed.

“The Chancellor must continue to balance the need to invest in a long-term, sustainable recovery while responding to the urgent challenges that companies are experiencing today.”

The British Chambers of Commerce (BCC) said businesses would celebrate many of the Chancellor’s announcements – but added it was likely that the scale of the stimulus needed to help the UK economy restart, rebuild and renew would need to be greater still over the coming months. 

Director general Dr Adam Marshall, pictured, said: “Targeted measures to help young people gain work experience and enter the labour market at this challenging time are welcome, and so too is the focus on a greener recovery and the acceleration of key infrastructure projects.

“The VAT cut will help firms in the hospitality and tourism sectors working hard to restart after many months of lost revenue.

“Over the coming weeks the Chancellor will also need to address the ticking clock on a number of other key concerns, including the impending end of key business loan schemes, and the unanswered question around what support will be offered to businesses and communities that face local lockdowns.”

The BCC also welcomed the help for the hospitality and tourism sectors, including the temporary VAT cut from 20% to 5% and August’s ‘eat out to help out’ vouchers.

Its head of economics Suren Thiru said: “The Chancellor has listened to our call for a temporary cut in VAT which will kickstart consumer spending in some parts of the economy. This is a welcome step and will help to stimulate a more rapid pickup in activity in those sectors and supply chains hardest hit as the economy gradually reopens. 

“While the Chancellor has listened to our call for a voucher scheme to incentivise consumer activity, the scale and scope of this scheme must be much bolder to make a material difference.” 

The BCC said the government now needed to consider taking further bold steps in response to this crisis such as incentives for business investment in the UK, including extending the £1m Annual Investment Allowance for a further two years and broadening its scope to include training, the transition to net zero and spending on making workplaces Covid-secure.




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