Posted by

Adam Marshall, Director of Policy and External Affairs

11 Dec 2012

Last week the Chancellor delivered one of the most important speeches in his yearly calendar, the Autumn Statement. George Osborne was in a difficult position – as he had to lay out his spending plans in the midst of global economic uncertainty, tight public finances, and with appropriate deference to the politics of coalition government.

The Chancellor deserves credit for his efforts to boost business and enterprise – notably his response to the BCC’s long-standing campaign on capital allowances, which will allow many companies to press ahead with crucial investments in plant and machinery. We also praised his decision to route more money toward export and international trade support, a critical ingredient in our future success as a country. And we applauded his decision to take up the recommendation from Lord Heseltine’s review to allow more local control over economic growth funding in England.  This is a move that many local businesses have wanted for some time, provided that they are able to directly influence the way that these resources are spent to support local growth.

Yet there was a nagging feeling that despite the Chancellor’s efforts, the Autumn Statement did not go far enough. If Britain is, as the Prime Minister has suggested, in a long and hard-fought global ‘economic war’, bigger and longer-term policy decisions are needed to ensure that the UK is the best place to be in business.

We were hoping to see more detail on the timescale for the British Business Bank, a crucial pillar in the long-term business finance environment here in the UK. We would have liked to see greater urgency around the delivery of infrastructure – going even beyond the Chancellor’s welcome commitment to re-prioritise £5bn from current spending to crucial transport, housing and digital infrastructure projects. If business is to power growth, it needs the right long-term foundations. And those foundations, from energy supply to aviation connectivity to business finance to getting the right training for our young people, are still weaker than we would like to see.

We understand that no government can please everyone – and we are happy with the Chancellor’s responsiveness to many of business’s short-term concerns. Yet he now faces two more difficult tasks.

First, delivering on the promises made during the first half of this Parliament, despite both political uncertainty and Whitehall inertia. The roads, railways, broadband schemes, schools and housing projects identified for action must be jump-started.

Second, the Chancellor must now think about his long-term legacy to Britain’s business environment. He has earned significant praise amongst businesses across the country for his efforts to improve the state of the public finances. The question is now whether he can win their trust on the big issues for the future – business finance, infrastructure, and a well-trained workforce. The answer depends on how radical and long-termist he can be – both in his March budget and beyond.