Business groups urge chancellor to unveil autumn Budget policies early
Business lobby groups have urged chancellor Rishi Sunak to make early announcements on the upcoming autumn Budget, in a move to quell fears over the current economic uncertainty.
Chancellor Rishi Sunak is expected to deliver the Budget in November, though reports last week suggested the announcement could be pushed back to spring 2021 if the UK is hit with a second wave of coronavirus.
The last budget was delivered in March, marking Britain’s first post-Brexit spending statement.
And last week Rishi Sunak published a written statement to the House of Commons, in which he asked the Office for Budget Responsibility (OBR) to prepare an economic and fiscal forecast “to be published in mid to late November”.
In response, the SNP’s Kate Forbes MSP wrote in a tweet: “Postponing the UK Gov budget would undermine the Scottish budget & create unnecessary uncertainty for Scottish businesses & residents.
“We need certainty on spending and tax plans. The delayed UK budget last year made it difficult enough – but this year would be unthinkably hard.”
But with the possible budget statement at least two months away, prominent voices within the business community have come out against this proposal, highlighting that many businesses are already under extreme financial pressure.
Speed up budget announcements to help businesses
Much of the autumn budget will rest upon the possibilities of a second wave of coronavirus, national lockdown and a Brexit trade deal.
Emma Jones, founder of small business support network Enterprise Nation, said: “Any heads-up on important changes is useful, but it’s pointless if the detail does not exist.
“With all the uncertainty at the moment due to the pandemic, and the lack of clarity as we approach the Brexit cliff-edge, small firms are well accustomed to adapting quickly – and they undoubtedly will have to again.“
Meanwhile, chief economist at the Industries of Directors (IoD) Tej Parikh said that while the budget in November remains a “provisional framework”, businesses are relying on the government’s “forward planning”.
He said: “We’re hopeful that the budget in November is going to be the key moment where all of these policies are pushed through and I don’t really think there’s not much room to delay any more.
“Having said that I think there is a case actually for the government to make some form of early announcements around what they plan to put in that budget given that we know that the furlough scheme ends in October and we know that all these other kinds of schemes are winding down.
“So, the earlier the government can give some kind of indication about what they plan to do in that November budget I think the better.”
Sunak faced with ‘triple threat’
The government faces a catalogue of tasks over the next few months, from negotiations with the EU to securing a trade deal and winding up the Job Retention Scheme.
British Chambers of Commerce co-executive director Claire Walker said: “Faced with the triple threat of support schemes winding down, the prospect of local restrictions and the end of the Brexit transition period, the chancellor should not wait until November to deliver the fiscal stimulus our business communities so desperately need.
“Reducing the cost of employment by expanding the National Insurance Employment Allowance and raising the threshold for employers’ National Insurance contributions, as well as extending Business Rates Relief to all sectors hit hardest by coronavirus are just some of the immediate ways that the government can help businesses to successfully rebuild, restart and renew.”
Furlough scheme and Brexit to impact next two quarters
Parikh also drew attention to the impact of both the end of the furlough scheme and Brexit on the upcoming quarters.
“It really is going to be a crucial moment for them to ensure that the economy has enough support at that stage given how we are going to be dealing with whatever happens at the end of 31 December with Brexit and then the challenges of the next quarter,” he said.
“First quarter next year when businesses start having to pay back the interest on all these loans they have taken out during the pandemic.”
Jones spoke in detail about creating a Brexit ‘vouchers system’ to help small businesses navigate their way through whatever may come.
She said: “We called for Brexit vouchers back in 2018 to help fund the financial outlay small firms will undoubtedly need to pay for specific advice, time spent budgeting and forecasting for any or all of the scenarios they may face. An early announcement on vouchers would be welcomed in order to organise deployment.”
Jones also praised the work the government has done so far during the pandemic.
“The Government has already demonstrated its support for smaller firms over the pandemic. Enterprise Nation is running the Recovery Advice for Business initiative on behalf of the Government and we have thousands of willing accredited advisers offering free support. This could very simply become a platform to deliver Brexit advice via a vouchers system and could be up-and-running very quickly,” she said.
Rishi Sunak is still expected to announce a multi-year spending review before the end of 2020. However, a Treasury source told City A.M. the Budget would be announced “in the usual way”.
Back in July, the chancellor confirmed he will set three years of day-to-day budgets from 2021-22 to 2023-24, alongside four years of investment budgets from 2021-22 to 2024-25.