Prime minister Boris Johnson has been urged to provide greater transparency on the government’s future plans and how they will impact on the business community after setting out his key priorities today.
Johnson’s Conversative Party secured a comfortable majority in last week’s general election, and today’s Queen’s Speech laid bare the new government’s ambitions for the year ahead.
Top of the agenda was a firm commitment to force implement Brexit by a deadline of January 31, but pledges also included major NHS funding and a tougher approach on crime.
Commitments with implications for business included a 50% business rate discount for small firms – including independent cinemas, music venues and pubs – as well as a pledge to cut greenhouse gas emissions and accelerate the delivery of gigabit-capable broadband.
However, while these moves were welcomed, business leaders demanded clarity on Northern Ireland and the National Skills Fund, progress on the HS2 rail project, and a business-friendly budget in the new year.
Edwin Morgan, Director of Policy and the Institute of Directors said: “After years of deadlock, business leaders will be very keen to see progress on some of the key challenges holding back enterprise.
“Action on issues like broadband and regional growth will chime with many directors’ priorities.
“Elsewhere, the commitment to ramping up R&D spending while incentivising business investment should help drive productivity growth, the lack of which has been a drag on the economy for a decade.
“While businesses will be pleased to have a stronger framework to plan from, there are still some details still to be filled in the Government’s blueprint.
“A business rates review is overdue and welcome, but it’s an area where progress is hard to come by, and more information is needed on the proposed National Skills Fund.
“Similarly, while the Conservatives’ broader commitments around transport networks are definitely heading in the right direction, business leaders will still be waiting for clarity on big-ticket projects like HS2.”
And on Brexit, he added: “It’s essential for the new Government to understand that a bespoke new trade deal with the EU makes it all the more difficult for businesses to prepare in advance of knowing exactly what changes this will bring.
“It should commit to a proper adjustment period once negotiations are concluded, as is standard for most trade agreements and wider regulatory change.
“The Government also needs to come forward with commitments to protect Northern Ireland’s place within the UK’s domestic market, in light of new costs and potential barriers to internal trade that the withdrawal agreement could spell for Northern Ireland.”
Changes to the Corporate Governance Code and powers of intervention also provoked comment from the IoD.
Roger Barker, the body’s Head of Corporate Governance, said: “Having been stalled by Parliamentary proceedings, it’s positive to see the Government move forward with reforms to beef up the accounting regulator while exploring other ideas to secure trust in business.
“However, the concern remains that such a regulator would not be a good fit for either the Corporate Governance Code or the Stewardship Code.
“Even within the existing model, it can occasionally appear as though governance is simply an adjunct of the accountancy profession, and we risk pushing the UK’s framework towards a more legalistic, US-style regulatory approach with limited scope for flexibility.
“The Government’s proposals to strengthen its powers to investigate and intervene in business transactions also gives cause for caution.
“If those powers are excessively politicised, the UK’s status as a leading destination for foreign investment and location for corporate headquarters and operations would be at risk.”
Mike Cherry, National Chairman of the Federation of Small Businesses, welcomed many of today’s key pledges, but insisted they must be followed by further support for small companies.
He said: “We’ve fought hard to secure an extension of the business rates retail discount. Today, we’ve seen the first step towards that extension being enshrined in law.
“Our small high street businesses are faced with a hugely challenging environment – confidence among small retailers has tumbled to new depths this year. This reduction in the £25bn business rates burden promises to help breathe new life into our small shops, restaurants and cinemas.
“It’s vital that this Queen’s Speech is now followed-up with a business-friendly budget in the new year, one that encompasses the fundamental review of the regressive rates system promised today.
“Employment costs have spiralled over the last 12 months, with increasing numbers of businesses citing them as a barrier to growth. It’s critical that the government delivers on its commitment to increase the employment allowance for small firms.
“Small businesses are looking to this new administration to inject some stability and certainty into the Brexit process. Swiftly agreeing a future trading relationship with the EU – and countries beyond the bloc – should help to reinject some confidence into the small business community. All future UK trade agreements must include a small business chapter.
“This government’s commitment to bolstering broadband investment is hugely welcome. As business owners, we can’t run before we can walk. We need the fundamentals – not least decent connectivity – in place before we can achieve our full potential.”