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East Midlands Chamber News

Chamber Urges Chancellor to Focus on Growth, Not Austerity, in Summer Budget

Chris Hobson, Director of Policy and External AffairsChancellor George Osborne should use his first Budget on a Conservative mandate to deliver measures which will help to boost productivity and economic growth in the UK.

East Midlands Chamber (Derbyshire, Nottinghamshire, Leicestershire), has said that while the focus of this week’s Summer Budget must be on delivering a plan for fiscal consolidation, it needs to be balanced against the need to boost productivity and nurture growth.

The Chamber has identified six key areas which it believes the Chancellor should focus on and is calling on him to deliver a Budget which supports business to:

Move – The Government must recognise the importance of infrastructure investment in the East Midlands and should clarify, without delay, its delivery and spending plans for major infrastructure improvement schemes including the Eastern Leg of HS2, the electrification of the Midlands Main Line, the widening of the M1 motorway through the region to four lanes and utilising the spare capacity at East Midlands Airport in the period before the new runway is built at Heathrow.

Invest – Further clarity is needed over annual investment allowance changes at the end of the year – a vital tool for businesses looking to grow.

Innovate and Diversify– R&D tax credits have had a good run in recent Budgets and Autumn Statements. Headline rates have become more generous for both large and small companies and these should be extended rather than reversed.

Export – There are huge opportunities in the global marketplace for local firms working in all areas, from small-scale production through to high-end services. It’s crucial that businesses thinking of starting to export or those looking to grow their international activities can access the support and finance they need to achieve their ambitions. To address this, the Government should implement in full the recommendations of the Cole Commission’s final report into UK exports.

Attain Skills – While the Chamber has long argued that businesses should have a bigger say over how training funding is spent, many companies – SMEs in particular– are not in a position to take full control over apprenticeship funding. It is therefore essential that the Government provides clear direction and support to businesses on funding reform, taking into account all sizes of employer, to give firms the confidence to invest in developing and training their workforce.

Manage their Day-to-Day Challenges – Business rates remain a key issue for businesses of all sizes. Ensuring that the Business Rates Review announced at Autumn Statement 2014 delivers fundamental reform to fix this uniquely iniquitous approach to taxing business is essential.

Chris Hobson, Director of Policy and External Affairs at the Chamber, said: “The focus of George Osborne’s first Conservative Budget as Chancellor must be on delivering a plan for fiscal consolidation that demonstrates a clear balance between the need to eliminate the deficit, boost productivity and crucially, nurture growth.

“Businesses across the East Midlands believe that Government spending remains far too focused on areas of current spending that add little to economic growth. There are also concerns that an up-front commitment to freeze some of the major taxes for five years will leave the Government with little room for manoeuvre should economic circumstances change.

“A more balanced approach to fiscal consolidation will help to remove the worst of the spending ‘rollercoaster’ predicted by the Office for Budget Responsibility.

“Businesses in Derbyshire, Nottinghamshire and Leicestershire stand ready to take on the challenge of ensuring the Government realises its ambition to make the Midlands the UK’s ‘Engine for Growth’, but they can do so only with world class transport, energy and digital infrastructure, access to a highly-skilled workforce and support to take full advantage of opportunities in the global marketplace.

“In order to solve the productivity puzzle, the Government must continue to sharpen its focus on growth – and focus Budget measures on the most productive areas of the economy.

“If the last Parliament was defined by austerity, this one must be defined by growth.”