2019 Spring Statement: London businesses share their thoughts

Less than three weeks until Brexit, Chancellor of the Exchequer Philip Hammond has delivered his Spring Statement to the House of Commons.

In the wake of last night’s vote, Mr Hammond began his presentation by alluding to the “cloud of uncertainty hanging over the economy” due to the UK’s pending withdrawal from the EU, but insisted that the economy remains robust.

Following last year’s announcement of an increase in NHS funding, Mr Hammond said spending in other departments can be considered, and has outlined plans for a spending review to go ahead in the summer - providing that the government reach a Brexit deal.

Mr Hammond also addressed the issue of ending low pay with a 2020 pledge, announcing the investment of £3bn into affordable housing, and encouraging immigration of skilled professionals by removing PhD caps and paper landing cards for USA, South Korea, Japan, Singapore, Australia and New Zealand nationals.

Bdaily collected statements from London business leaders across a range of sectors to get their thoughts on the Chancellor’s Spring Statement.

Marc von Grundherr, Benham and Reeves

Marc von Grundherr, director of property specialist Benham and Reeves, commented: “It may seem as though the chancellor has come out fighting for UK homeowners, but today’s spring statement was predictably compiled of regurgitated rhetoric and slightly misleading claims where the property market is concerned.

“Of the 220,000 new homes delivered last year, around 10 per cent were, in fact, refurbs not new builds and we remain light years away from the government’s magic target of 300,000.

“Help to Buy is arguably the poisoned chalice that has seen prices continue to inflate due to the uplift in demand it has fuelled, while new stock delivery remains inadequate.

“This playing field may be re-levelled should we see the £3bn affordable homes initiative bring the expected 30,000 additional homes, but as is often the case, these cash promises rarely provide a notable return.”

Frances O’Grady, TUC (Trades Union Congress)

TUC general secretary Frances O’Grady said: “While the chancellor pats himself on the back, working people are paying the price for the prime minister’s disastrous mishandling of Brexit.

“Jobs are being lost, plants are under threat and much-needed investment is being cancelled.

“The government created this mess - it must clean it up. That means taking no-deal off the table and seeking an extension of Article 50.

“We need a deal that puts jobs, rights and peace in Northern Ireland first. And we need a financial settlement that supports industry and ends austerity once and for all.”

Markus Kuger, Dun & Bradstreet

Lead economist at business data specialist Dun & Bradstreet, Markus Kuger, commented: “In today’s spring announcement, the Chancellor of the Exchequer presented new economic forecasts to the public.

“Worryingly, despite unexpected robust real GDP growth in January, the economy is now forecasted to expand at a slower pace in 2019 than initially thought.

“While this is not a UK specific development (Germany and France recently lowered their forecasts too), it highlights the risks the British economy is facing in 2019, caused by a European downturn but mainly because of the unclear Brexit situation.

“Today’s announcements did not change Dun & Bradstreet’s assessment of the UK’s country risk rating.

“While some indicators such as public borrowing and labour market conditions continue to produce good news, others like confidence indicators paint a relatively bleak picture.”

Jonathan Richards, Breathe

CEO of SME HR software platform Breathe, Jonathan Richards, explained: “The Chancellor has stated that the UK economy has been growing for the last nine consecutive years and is expecting an additional 600,000 new jobs by 2023.

“He also reveals there is a £37bn productivity fund, this investment into skills and talent is a step in the right direction, however there is still a long way to go.

“Businesses need certainty, especially SMEs accounting for 99.9 per cent of all private sector businesses in 2018. It is therefore crucial for a more robust plan to support small business with the correct tools to stay afloat and continue to grow.”

Alisa Zotimova, AZ Real Estate

Founder and CEO of property consultancy AZ Real Estate, Alisa Zotimova, commented: “Bar the pledge to increase affordable homes supply, there was little good news for the wider property industry today.

“I would have liked to see a review of current stamp duty thresholds across the piece, particularly for older downsizers who can help free up the rest of the market.

“With Brexit looming I would also urge the Chancellor to think long and hard about the additional 1% stamp duty for foreign buyers that is being considered. We’re going to need to encourage overseas investment more than ever and this punitive policy sends out entirely the wrong message – take your money and buy a home elsewhere.

“Let’s not forget that each home here also means money spent on restaurants, taxis and services, not to mention property industry services along the way – it’s all job creation and tax income.”

Vivek Madlani, Multiply

Co-founder and CEO of freelancer financial planning service Multiply, Vivek Madlani, said: “It’s disappointing that today’s Spring Statement didn’t go any way to calming the concerns of self-employed people who have been legitimately using the limited company model to supply their services.

“Millions worry that their objections are not being heard and that they will be forced to pay far more tax on their earnings that they’re not prepared for – reducing net incomes by up to 25 per cent in some cases.

“Clearly, those that are trying to game the system should be called out, but it is a highly complex area and many contractors struggle to understand their IR35 status.

“As the Chancellor’s examination continues I would advise self-employed people to seek professional legal guidance on their IR35 status and to ensure they are building an emergency fund just in case they are affected by the new regulations. This should be big enough to cover at least six months of earnings and is a sensible safety net to have in any case.”

Gautam Sahgal, Perkbox

Gautam Sahgal, chief operating officer at employee experience platform Perkbox, commented: “Much of the UK’s success to date has been achieved from its ability to become a beacon for talented and ambitious individuals from Europe and beyond.

“But putting Brexit aside, the biggest challenge for UK prosperity right now is absolute and relative productivity which has been stagnating for the past decade and today was confirmed will be far slower than was forecast two years ago.

It’s great to see investment in areas of public spending such as genetic research and laser technology, to support some of Britain’s fastest-growing industries.

“However, this is not going to help the average British employee struggling with low wages and increasing uncertainty over Brexit.

“Unemployment might be at its lowest rate right now, but with stagnant productivity, labour shortages could soon add to our numerous growth challenges.”