Responding to the Spring
Forecast delivered by the Chancellor of the Exchequer,
Anna Leach, Chief Economist of the Institute of Directors, said:
“The Spring Forecast achieved half of its objectives. No policy
speculation and no new tax announcements will definitely be
welcomed by business leaders. But public spending and borrowing
both increase further, and there's an assessment of the fiscal
rules, despite previous commitments. Half of a welcome
improvement in fiscal headroom is spent on SEND and local
authority budgets, amidst warnings from the OBR that future
increases in the tax burden risk competitiveness and growth.
Meanwhile that improvement in headroom – delivered through equity
market over-performance – could be wiped out by recent global
developments.
“Two key areas stand out from today's OBR report: the negative
impact on growth coming through from past policies, and warnings
of further risks to growth down the line. Projected growth has
been lowered in the short-term as the impact on the labour market
and confidence from chaotic policy management, and increased
employment costs, weigh more heavily than anticipated. Inflation
only comes down quicker in the forecast due to a weaker economy.
How businesses manage the significant cost increases with which
they are grappling is highlighted as a risk. Progress on planning
reform stands to be reassessed in the Autumn – the biggest area
where government policy has been assessed as
growth-positive. And recent developments in the Middle East
are not in the central forecast.
“The UK's growth outlook is increasingly fragile and risks are
only growing. Bolder and swifter action is needed to remove
blockers to growth from the planning system, address damage done
to the labour market, and bring down costs for business.”
