The CBI has given an immediate positive reaction to the Autumn Statement with its director-general John Cridland saying it “works with the realities of today and provides an imaginative framework for UK businesses as it strives to secure growth and jobs”.
The CBI had called for a Plan A plus and Mr Cridland said this was one in all but name. “The downgraded forecasts and outlook were no surprise, but the Eurozone crisis is still hanging over us. The Government’s dogged commitment to budget deficit reduction remains the only way to maintain the UK’s triple A credit rating and low interest rates on international money markets.
“We particularly welcome the new emphasis on capital spending, and the measures to leverage private sector investment on infrastructure for roads and energy.
“Equally important for jobs and growth is the recognition that the UK’s energy-intensive users need help as a result of the unilateral increases in manufacturing energy costs from the carbon floor price and electricity market reform.”
Mr Cridland also welcomed help for mid-sized businesses saying: “We are delighted that our campaign to gain support for medium-sized businesses has been heeded and we warmly welcome the Business Finance Partnership and measures to support exports.”
But the Chancellor’s pledge to ease employment regulations on small firms got short shrift from Mike Emmott, employee relations adviser at the Chartered Institute of Personnel and Development (CIPD).
He said: “Pitching employment deregulation as a major contribution to driving growth is at best a distraction and at its worst could undermine efforts to boost competitiveness and productivity.
“Recent survey evidence for BIS (Department for Business, Innovation and Skills) shows that the proportion of small businesses that regard regulation, including employment regulation, as the main obstacle to business success was only 6%, and this figure has halved over the last two years.”
He said removing significant employment protections would have an adverse impact on employee engagement, risking the very economic recovery that the Government is trying to nurture.
“The proposal to introduce compensated no-fault dismissal for the smallest firms runs exactly this risk,” he said. “There is also a danger of creating a two-tier labour market causing confusion for employers and employees alike, and introducing a perverse disincentive for micro-businesses to recruit more staff and grow.”
Speaking during a visit to meet members in Bristol, Michael Izza, chief executive of ICAEW (Institute of Chartered Accountants in England and Wales) said: “The test for today’s Autumn Statement will be whether or not it gives businesses reasons to invest in the UK’s economic future. The combination of credit easing and other specific measures could be a lifeline to businesses, particularly SMEs who are currently struggling. However, companies will not be prepared to take on more debt until they have more confidence about the medium to long term outlook.”
