Written by
Robert Lloyd Griffiths
Director
IoD Wales
Business leaders have entered 2021 facing critical challenges.
For those that kept afloat in 2020, many entered the new year with poor cashflow, limited reserves, high debt and payment deferral burdens, and a reduced workforce.
With an effective vaccine rollout and reduction in restrictions there is every chance the economy can bounce back later this year. However, fiscal policy measures will need to be an essential driving force behind that and that’s why the IoD is calling on the Government to remove the cliff-edge of existing support in the spring.
Impetus from spending and tax measures will be vital in our eventual economic recovery. Indeed, over 80% of our members believe the Government should, for the time being, prioritise stimulating economic growth over reducing the deficit/level of debt.
Business will be a key driver for economic growth in 2021 and beyond as they look to rescale, innovate, and take staff back on. That’s why the forthcoming Budget is a crucial and opportune moment to provide an off-ramp from covid-19 economic support and deliver a stimulus package to turbocharge hiring, innovation, reskilling, and ultimately, growth.
The Chancellor of the Exchequer, Rishi Sunak, has announced that the government will publish the Budget on Wednesday 3 March 2021 and having published our Budget submission last week, we are urging Mr Sunak, now one of the most recognisable faces in British politics, to put entrepreneurs at the heart of the recovery, and avoid damaging tax hikes.
As well as calling for an extension of measures to deal with the ongoing economic impact of Covid-19, we have called for a stimulus package to unleash investment in start-ups and scale-ups through targeted reliefs. In the year of COP26, we are also urging help for SMEs to play their part by setting up a new Digital & Green Recovery Credit, to accelerate their investment in technology and carbon reduction.
We firmly believe that entrepreneurs need to be at the front and centre of the Government’s recovery plans. Businesses will be creating the jobs and driving the innovation that the economy needs to rebuild—and this Budget must support them.
Now is also not the time to be experimenting with higher taxes. Tax hikes right now risk choking off the economic recovery before it has even got started. Instead, the Budget should put a shot in the arm of entrepreneurs by providing reliefs to drive-up investment in enterprising businesses and encouraging small firms to invest in technology, retraining, and green growth. Slashing the burden of business rates and employers’ NICs will also help create the margins for firms to hire and rescale.
We very much hope that the Chancellor will use this Budget to set out a long-term vision for our economy with the right support to make sure that small and middle market businesses are the driving force of our recovery. That’s certainly what Wales needs.
