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Spring Statement 2018: Institute of Directors reaction

Tuesday March 13th, 2018

The Institute of Directors reacts positively to the business-friendly Spring Statement (March 13th).Government Opportunities

In response to today’s Spring Statement from the Chancellor of the Exchequer, Tej Parikh, Senior Economist at the Institute of Directors, said:

“The Chancellor was right to stick to his guns and avoid too much tinkering today. Businesses have had to deal with plenty of new costs over the last few years, including the apprenticeship levy, immigration skills charge and pensions auto-enrolment, so they will be relieved to see a no-frills statement. This was an upbeat and pro-business speech. IoD members will be pleased to see that growth is currently beating the forecasts and the deficit is falling.

Better short-term economic figures will reassure business leaders that there is underlying resilience in the UK economy, but the Chancellor was also right to point to the long-term productivity challenge. The OBR continued to be downbeat on productivity growth, with recent increases largely driven by a fall in hours worked, rather than a pick-up in output. As such, the Government must continue to push forward with its proposals in November’s Industrial Strategy and make clearer to businesses how it will bolster skills, infrastructure, and innovation.

The IoD agrees with the Government’s view that the taxation of certain global business models may well require action under the auspices of the OECD. We would be concerned if measures were introduced just in the UK, or in a limited number of countries, as this would risk driving these businesses (and the high-value jobs they provide) to countries which don’t take the same action. This would be a bad outcome for the UK.

We welcome Government’s acknowledgement in the Chancellor’s Spring Statement that a broader, simpler, compliance-friendly tax relief to encourage individuals to undertake training which will directly benefit the UK economy is necessary. Hopefully, the outcome of the Consultation will provide a sufficiently generous but focused new tax relief for those individuals who do not already benefit from courses provided by their employers.”

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