With the US election in turmoil, the possibility of legal fights and only a week to go before a final decision on a Brexit deal, there is huge uncertainty facing UK businesses.
Against the backdrop of all of this and the new lockdown, the Chancellor needs to act positively and set out a clear plan for 2021 rather than continue to only react to crisis.
The only way forward for the UK is for economic growth to stimulate job creation and increased tax revenues. For UK businesses to play their part in this journey they are crying out for a stable economic environment to operate within. Only then could any business be expected to be able to plan for the future and make decisions over investment in equipment and people or the direction of their business.
Currently business decisions are inextricably linked to the various Coronavirus measures in place. However, these remain hopelessly short-term. With the rehashed Job Retention Scheme (JRS) coming to an end on 2 December, the likelihood of a tiered Job Support Scheme to follow, short-term extensions to the Coronavirus lending schemes extended only to 31 January and scant detail on the announced successor loan scheme, businesses are faced with making decisions as to the future of their business on a weekly basis. This results in a lack of confidence to invest in their future and a reactive business environment when long-term planning and growth is needed.
The Chancellor has delayed his budget, which was a missed opportunity to provide clear guidance on his intent for fiscal policy in 2021 and beyond as well as provide measures to incentives growth and entrepreneurialism. Simple measures such as increasing the tax incentives afforded under the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment (SEIS) schemes or increasing the Research and Development Tax Credit would send a positive message to help investment in UK business.
The JRS could have been extended well into 2021 but with a message that the rates of Government contribution and qualifying sectors would be reviewed periodically. This would have provided longer-term comfort to businesses as opposed to the cliff edges that have occurred when previous Coronavirus support measures have been withdrawn. This has only served to create uncertainty and not preserve employment.
To be able to plan for 2021, UK businesses need answers now on trade deals, Brexit, longer-term Coronavirus support measures and stimulus for investment in UK business.