Summer economic statement: the business community reacts
The business community has reacted to the government’s plans for economic recovery following the pandemic.
In today’s statement, Chancellor of the Exchequer Rishi Sunak announced a job retention scheme and a VAT cut for the hospitality sector.
Catch up on the key points of the statement here.
Figures from across the business community have commented on the new measures.
**Chris Turner, British BIDs **
“Hats off to the government for its support package so far.
“The Covid crisis has hit much of our membership, which consists of many thousands of businesses across the country, and we have been helping them access the furlough scheme, grants for smaller businesses and loans for bigger ones.
“Today’s announcement of a VAT cut to 5 per cent and cash for employers to bring back staff from furlough and provide jobs and apprenticeships for young people will help greatly.
“We’d now like to see businesses affected by future localised lockdowns prioritised and given additional direct grant funding. This could be paid for by the many millions that remain unspent from the national business support grants.
“And we must now seize the opportunity to widen the promised fundamental review of business rates - the review should now include all government income streams and all tax options. We must get on with this with urgency.”
Jeff Doble, Dexters [Estate Agents]
“The Chancellor’s stamp duty announcement is to be welcomed as it will help so many people buy a home in London and provides a timely boost to the market.
“However it is not the fundamental reform that is really needed.
“The whole idea of stamp duty has suffered from “mission creep”, having evolved from a relatively harmless token amount to a huge percentage that is stifling and unhealthy for the market.
“Whilst the announcement will help boost demand for flats across London, the current stamp duty system is not helping property sales at higher levels of the market.
“In our view a reduction in stamp duty across the board or a complete stamp duty ‘holiday’ at all price levels for six months would be a better solution, along with a relaxed planning policy to help boost housing supply and maintain the momentum and recovery to the housing market.”
Mark Hammond, iOffset [carbon offset company]
“The Chancellor’s announcement today of a £3bn green investment package is welcome, but is only the first step in the nation’s green recovery and in further supporting businesses and consumers in reducing their carbon footprint.
“There is still a significant way to go and as a nation, and global community, there needs to be a step change in how we tackle this issue.
“Individuals and businesses must be assisted in reducing their carbon emissions, offsetting those that are unavoidable and sharing the message to ensure we all play our part.
“We therefore urge the Chancellor to build on today’s commitment and facilitate a wider-scale green recovery strategy that includes the regulation of carbon offsetting schemes to ensure that they are transparent and legitimate.
“This strategy must bring the nation in line with the significant investments being made by many of our European counterparts and ensure that the UK meets its target of being a carbon net zero economy by 2050.”
Luke Davis, IW Capital
“This period has been incredibly challenging for every sector of business and especially the hospitality sector, in which many businesses rely on packed spaces to make the most of custom.
“Today’s announcements will come as a welcome boost to the sector as they encourage people and customers who are very conscious of their finances to get back into pubs and restaurants.
“Innovation will be needed to make new restrictions work for businesses and customers, but this is something that UK SMEs have in spades.
“Now, with this added support from the government and as private finance providers, could be a fantastic opportunity to support businesses in this sector at a time when they need it most and with the biggest opportunity for growth.
“When lockdown and social distancing restrictions are eventually fully lifted this period could lead to a new age of innovation and improved customer experience in hospitality, making it an exciting sector to be a part of.
“The job retention bonus will undoubtedly help small firms to retain staff.
“No leader of a small business wanted, or now wants, to make staff redundant, for the majority of those employed in the UK - by the SMEs - leaders are doing everything in their power to keep on staff.
“We hope this help will allow firms to keep staff on and then think once more about their ambitions in terms of growth and job creation.”
Mike Cherry, Federation of Small Businesses (FSB)
“We’ve always said that the Chancellor should take a jobs first approach to today’s intervention and that’s exactly what he’s done.
“The Chancellor is absolutely right to stress that the job of getting the economy back on its feet has only just begun.
“Will this set of measures be enough to spur activity over the coming weeks? That’s something that will need to be kept under close review – we may need further action before the autumn.
“The key now is making sure these positive new measures work for all, especially the small firms that make-up 99 per cent of our business community and employ 17 million people.
“The job retention bonus must be easy to access. We can’t have paperwork holding up this vital support.
“We pushed for incentives to take on apprenticeships and it’s good to see those delivered today.
“The funding and subsidies for apprenticeships, kickstarter roles and traineeships also need to be accessible. Young people are looking for work now.
“A VAT cut for food, accommodation and attraction businesses alongside the ‘eat out to help out’ initiative marks a critical step forward.
“We look forward to collaborating with policymakers on the latter to ensure that those who are deserving don’t miss out.
“The Treasury should now assess how it can build on this progress, taking another look at our regressive business rates system once we get to the autumn.
“The focus on green jobs and infrastructure is encouraging to see. Making small firms a central part of this push will be critical to its success and local growth.
“Our late payment crisis has worsened throughout lockdown and we need to see the government taking a zero tolerance approach on this front: if you can’t pay on time, you don’t win public contracts.
“Equally we need to know that green vouchers and incentives will be extended to small business premises as well households.
“Whilst the majority of small businesses have been supported by the Chancellor’s emergency measures, some have not.
“We need the government to spell out how it will help the newly self-employed and company directors who have once again been overlooked this afternoon, and have now been left without help for more than 100 days during this incredibly difficult period. That fact should be recognised once we reach autumn.”
Ian Wright, Food and Drink Federation (FDF)
“The FDF is extremely appreciative of the unprecedented support the UK Government and the devolved administrations have provided throughout this crisis.
“Up and down the country, the ‘Hidden Heroes’ of the UK’s food and drink industry have kept the nation fed through the last few difficult months.
“The UK’s food and drink manufacturers who supply into the hospitality and catering trade have been hard hit by the crisis, as their customers disappeared overnight.
“These ‘squeezed middle’ firms will enthusiastically welcome the Chancellor’s announcement today to cut VAT on food and hospitality and slash the cost of eating out.
“We hope these measures will lead to a significant boost in demand for the hundreds of manufacturers who supply into hospitality and the out of home sectors and help them to manage increased supply costs.
“However, if demand does not return quickly, these firms will continue to struggle unless they - and the sector they supply - receive additional employment support.
“The Chancellor must therefore keep the option of extending full furlough support to hospitality and their food and drink suppliers in his back pocket so we do not lose vital jobs and businesses.
“The closure of hospitality has disproportionately affected young people’s employment prospects.
“We applaud today’s interventions to increase employment opportunities for young people who would otherwise be hit hardest by unemployment.
“The FDF is pleased that the government heeded our call to introduce cash incentives for employers taking on new apprentices.
“We would now welcome the opportunity to work with government to ensure food and drink manufacturers can make the most of the schemes announced, as our industry offers great careers, in every constituency.”
Frances O’Grady, TUC
“Mass unemployment is now the biggest threat facing the UK, as shown by the thousands of job losses at British Airways, Airbus and elsewhere.
“The government must do far more to stem the rising tide of redundancies. We can’t afford to lose any more good skilled jobs.
“The chancellor should have announced targeted support for the hardest-hit sectors like manufacturing and aviation.
“Struggling businesses will need more than a one-off job retention bonus to survive and save jobs in the long-term.
“Unions campaigned for a job guarantee scheme. Kickstart is a good first step. But if the government allows vital industries to go the wall, unemployment will surge and the recession will last far longer.
“The more people we have in decent work, the faster we can work our way out of recession.
“We must create jobs through more new public investment in new homes, childcare, faster broadband, better transport and green tech.
“The government should have announced extra investment in jobs across all public services – starting with filling the 200,000 vacancies in the NHS and social care.
“And if the chancellor wants people to have the confidence to eat out, he should have announced a pay rise for hard-pressed key workers rather than dining out discounts for the well-off.”
Jonathan Walker, North East England Chamber of Commerce
“We had called for an economic intervention that recognised the potential for this crisis to entrench regional disparities.
“The Chancellor’s statement contained a number of measures that will provide short-term boosts to parts of our economy, but we continue to be dismayed at the lack of detail when it comes to long-term action to ‘level up’ regions such as ours.
“It was good to see the Chancellor acknowledge how hard the impact of the pandemic has been, and will continue to be, on young people in the early stages of their working lives.
“We hope the measures are effective in enabling them to be prepared for good quality jobs but to work effectively the Kickstarter scheme must not be overly bureaucratic or confusing.
“The £1k for returnees will help some firms but we are concerned this level of funding will be insufficient to make a real difference to a business in financial difficulty.
“Getting people spending in our great hospitality and leisure businesses is essential, but when this sector remains so vulnerable to further lockdowns we would like to see specific support to help them become as safe and resilient as possible.
“In essence the Chancellor’s Statement is too short on long-term strategy. He promised that Government was taking these issues seriously but with business confidence extremely fragile we cannot afford to wait too long for action.”
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