Businesses see Brexit as the elephant in the budget room

Despite individual positive measures, including those focused on tackling the UK’s long-standing productivity problems, business leaders remain cautious about the last UK budget before Brexit.

Philip Hammond, UK Chancellor of the Exchequer in a official UK parliament photo

Official portrait of UK Chancellor of the Exchequer, Philip Hammond, copyright UK Parliament https://creativecommons.org/licenses/by/3.0/

Business leaders have broadly welcomed the measures announced by Chancellor of the Exchequer Philip Hammond in his autumn Budget although, as always, Brexit is casting its sizeable shadow over their enthusiasm.

Institute of Directors: Allocate funds to help business in event of a "no-deal" Brexit

Stephen Martin, director-general of the Institute of Directors (IoD), said that for all the business-friendly announcements in Monday afternoon's statement to the Commons, he was disappointed no fund had been established to help businesses in the event of a 'no-deal' Brexit.“The chancellor showed he has listened to business leaders today with key reforms on business rates, the Apprenticeship Levy and the Annual Investment Allowance. But for all of the individual positive measures, including money for infrastructure upgrades, this was a Budget that pulled its punches," Mr Martin said.“Going into this Budget, IoD members urged the chancellor to prioritise help for Brexit preparations. It is not enough simply to announce a potential ‘no-deal Brexit budget’, businesses need to get ready now."While we hope the chancellor’s confidence that there will be Brexit deal is well-placed, firms have to look at all possible scenarios and will be deeply disappointed to see no funds have been allocated to helping them map out potential outcomes.“The chancellor also acknowledged the scale of the productivity challenge, but most of the measures announced today were too small to even make it into the main speech.”
More information about the latest UK 2018 budget and Brexit:

CBI: "A no-deal Brexit would be bad for taxpayers, business and the economy"

Concerns over Brexit were reflected in the City of London where Catherine McGuinness, the City of London Corporation’s policy chairman, said that she considered Mr Hammond "did the best he could" in his last Budget before the UK leaves the European Union."Charting a course for the UK’s public finances at this time is an almost impossible job," she said. "As the chancellor has acknowledged, a ‘different strategy’ would be required to steer the economy through choppy waters if a Brexit withdrawal agreement cannot be agreed.“A no-deal Brexit would be bad for taxpayers, business and the economy. It is in the interests of the UK and EU to secure a deal that maintains strong trade links. Getting this right could deliver a Brexit dividend for households and businesses on both sides of the Channel.”

TheCityUK: "If a Brexit deal is not forthcoming, then it is right that the Budget is rethought"

Miles Celic, chief executive of TheCityUK lobby group, added, "The commitment to greater infrastructure spending, particularly the emphasis on local transport and more money for the National Productivity Infrastructure Fund, are important steps towards addressing the UK’s productivity gap."The extra support for the Transforming Cities Fund and for other UK regional and national initiatives are further positive moves to support prosperity across the whole of the UK.“The Chancellor has been careful to maintain headroom to respond to any potential Brexit outcomes, however uncertainty continues to impact businesses on both sides of the Channel. If a Brexit deal is not forthcoming, then it is right that the Budget is rethought, with a much greater emphasis on business support and economic stimulus.” 
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EEF: the "chancellor has kept his eye on the ball of tackling the UK’s long-standing productivity problem"

Stephen Phipson, CEO of the manufacturers’ organisation EEF, said, in the context of next March's Brexit, Mr Hammond had delivered a realistic Budget with "firepower in reserve should the economy enter choppy waters when the UK leaves the EU".He continued, “Alongside this, however, manufacturers will be boosted that the chancellor has kept his eye on the ball of tackling the UK’s long-standing productivity problem, which remains a bar to raising living standards and improving our long term economic performance."Almost one year on from its inception, the further boost to the industrial strategy will signal to companies that the government is serious about backing it with funding in key areas for the long term."

BCC: Welcomes fact that government had listened to business concerns

Adam Marshall, director-general of the British Chambers of Commerce (BCC), welcomed the fact the government had listened to the concerns of business amid "an atmosphere of unprecedented uncertainty".He said the Budget supported investment and growth, adding, "“The chancellor responded directly to the BCC’s calls for bold incentives to turbo-charge business investment, for steps to support high street businesses struggling with business rates, and for measures that cut the cost of apprenticeships for SMEs."Philip Hammond has sent important and positive signals to businesses across the UK, many of whom have been wavering on investment and hiring. Crucially, the chancellor has avoided major increases to business tax to fund the government’s spending priorities, which would have undermined the confidence boost to firms from his commitments to supporting enterprise and growth.“While today’s Budget measures were largely positive for business, the final and most important piece of the jigsaw is a comprehensive Brexit deal that gives firms the clarity and precision they need. The pro-business measures announced in the Budget will only yield their greatest possible results when paired with a Brexit deal that delivers certainty on the UK’s future terms of trade beyond March 2019.”

CBI: a "rock solid" budget but the government should move in step internationally to implement the proposed digital services tax

Carolyn Fairbairn, director-general of the Confederation of British Industry (CBI), described the Budget as "rock solid".
She said, “It recognises the enormous contribution enterprise has made to balancing the UK’s books through jobs, pay and tax and responds to many of the recommendations that firms have made.“But while the chancellor has reduced some of biggest barriers to growth, he has missed some opportunities. That said, the new investment in broadband, research, housing and infrastructure will help tackle the UK’s glaring regional equalities head on."On the proposed digital services tax, Ms Fairbairn said, “The picture on tax is more mixed. Going it alone on a digital services tax is high risk. The government should move in step internationally, leading multilateral solutions, or risk losing our global competitive edge in digital.“All businesses should be at the cutting-edge of digital technology. If the UK is to break ranks with the international community, any new approach must be carefully built on evidence from a wide range of enterprises of all sizes."Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Global Mobility Toolkit download factsheets resource centreAccess hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online DirectorySubscribe to Relocate Extra, our monthly newsletter, to get all of the international assignments and global mobility news.