Chancellor Jeremy Hunt must do everything he can to unlock urgently needed business investment in the Autumn Statement, says Hampshire Chamber of Commerce.
The county’s ‘voice of business’ believes targeted tax cuts for firms are the best way to stimulate investment and boost growth amid continuing economic stagnation and uncertainty.
The call follows data from the Office for National Statistics that confirmed zero growth in gross domestic product in the third quarter of the year and a similarly constrained forecast for the coming three months.
Among the factors to dent economic confidence and momentum are high interest rates, inflation, subdued consumer confidence and pressures around energy costs.
Ross McNally, Hampshire Chamber Chief Executive, said: “Across many industry sectors, our members are facing significant challenges to their immediate working capital and longer-term trading activities. After three years of economic shocks, they are now having to deal with the corrosive drag of inflation, interest rates and rising energy bills."
“High borrowing costs create a double whammy. It means more expensive operating costs just at the time when demand is dampened from customers feeling the squeeze too. Coupled with this, recruitment challenges persist because of labour skills shortages, so adding further to the costs of trading."
“While inflation must be tamed, the Chancellor should be bold and take targeted steps to ease the tax burden on business. We call on him to extend the capital allowance scheme that allows firms to deduct the full cost of investments in IT equipment, plant and machinery from their profits, the so called ‘full expensing’ regime. Mr Hunt could extend this by a year or longer, or make it permanent. Any move in that direction would be welcome as a way to incentivise business investment."
“At the same time, he could announce more help on business rate relief, take steps to tackle delays in the planning system and provide more support measures for training and recruitment, and employees’ occupational health."
“For those Hampshire businesses selling into overseas markets, the government needs to champion the prospects for a globalised UK through a long-term export drive."
“The Chancellor must encourage more mid-size firms to aim for the opportunities that become available in global markets. That will require a major shift in support for exporting now and in the years to come."
“Another key national and regional priority is infrastructure. Business does not operate in a vacuum so the more that government can do on critical infrastructure such as transport, housing, energy, waste management, utility services and broadband, the better the trading landscape is."
“We need to see a clear, long-term growth strategy from the Chancellor that tackles weak economic performance, builds climate resilience, encourages global trade and improves the overall outlook for firms."
“Encouraging investment and supporting the environment that businesses operate in, is central to achieving that.”