Autumn Statement 2013: Government has to show flexibility to create growth
As part of our preview of Autumn Statement 2013, Stephen Gregson, partner at Moore and Smalley, offers his thoughts on what government can do to encourage investment and entrepreneurialism.
The principal challenge for the chancellor is to do what he can to reinforce the growing sense that the UK economy might well be turning a corner to better health.
Recent data (GDP statistics, PMI surveys and Chamber of Commerce surveys) all suggest that confidence levels among business owners are increasing. Yes, such increases in confidence are slow, halting and fragile, but they are increases.
It is arguably inconceivable that given the economic problems which have been borne in the UK over the last five years that the recovery would be anything other than slow and cautious. Many businesses which have survived thus far will be rightly cautious about rushing in to taking on too much debt or other obligations, assuming that such debt funding is available to them of course.
We are still not out of the woods by any means. Arguably few of the electorate believe that “we’re all in it together” anymore. The latest banking sector disclosures will not help in that regard. People may well want to see some form of clear decisive action from the coalition to address these ‘issues’ in the banking sector.
Dogmatically, such active intervention in the economy will not sit easily with many in the coalition, notwithstanding the fact that many of its policies have been, and are, Keynesian in all but name – Help to Buy being just the latest manifestation of this.
To give the coalition credit, it has by such policies, shown a willingness to leave its dogmas to one side in order to consider what might work to improve the economy. It seems likely that it will need to continue to show such flexibility into 2014 and beyond. –