Three years after the Brexit referendum, the one thing that business craves more than anything from the UK’s next government, regardless of sector or size, is an end to the uncertainty.
But executives are also looking for policies that will stimulate an economy hampered by poor productivity and encourage companies to start investing again.
Here are the five policy areas that business leaders and industry lobby groups have told the FT they would most like to see addressed by the winner of next month’s general election.
1. Brexit
“Sort Brexit” is a phrase that comes up again and again when talking to businesses. Many executives who are steadfastly against leaving the EU would now settle for the certainty of an agreement to leave the bloc.
But many also have strong views of what that Brexit deal should look like. The general consensus is an arrangement as near to the status quo as possible, including regulatory alignment for industries that trade with the EU.
Immigration is also key: the UK needs a “business friendly migration policy to enable business to have access to the labour the economy needs”, argues one private equity boss. This need is echoed by Adam Marshall, director-general of the British Chambers of Commerce: “There is a skills shortage in almost every part of the country — and we will need to hire from overseas.”
2. Education and skills
Businesses are concerned about the paucity of first time training and education adding to the productivity crisis and executives want to see greater investment at all levels of education. The CBI, a business lobby group, cites estimates by the consultancy McKinsey that 10m workers will need retraining over the next 10 to 15 years.
The most pressing issue for many is reform of the apprenticeship levy, a tax on UK employers to fund workplace training, following complaints that the money is not being used properly.
Stephen Phipson, chief executive of Make UK, the manufacturers’ organisation, said the public and business “want pledges that will support the creation of the skilled jobs we need, equip their children with the education and skills for the future and anchor value creating businesses in the UK”. Make UK has also called on the government to boost technical education.
3. Business incentives
Almost half of members polled by the Institute of Directors want some form of business incentive to boost investment.
“Firms are eager to see tax reliefs and incentives to support their ambitions to grow and invest in new technology,” said Edwin Morgan, director of policy at the IoD. “With uncertainty sapping energy from the economy in recent years, businesses and politicians need to make up for lost time on investment.”
There are calls for a number of sector-specific incentives, in particular for small businesses that are most at risk from the prolonged uncertainty around Brexit.
The Federal of Smaller Businesses (FSB) wants the £3,000 annual cap on the discount on national insurance bills increased to £13,000, to allow businesses to take on new staff.
Make UK has called for the “Made Smarter” pilot initiative to be rolled out across the country. This scheme offers small business grants of up to £20,000 to invest in industrial digital technologies, such as 3D printing or robotics. The BCC has called on the government to extend the annual investment allowance — a £1m capital allowance that can be used to offset the costs of plant and machinery — beyond 2021 and widen its scope. One chief executive pointed to the need to expand the Seed Enterprise Investment Scheme — which gives tax advantages to investors in early stage start-ups — and to incentivise creative services with tax credits.
4. Business rates
One of the biggest gripes is business rates, a tax on property that has in particular hit retailers and manufacturers. Executives argue that business rates are adding to the decline of the high street, given the additional costs for struggling retailers. “Sort out business rates,” said a chief executive of one retailer. “It is killing the high street.”
The FSB has called for a major reduction in business rates for small firms, with thousands struggling to survive as they face spiralling operating costs. The BCC has called for a business-led review of the system.
Mike Cherry, FSB national chairman, said: “Business rates reform must be a priority. This unfair, regressive tax — which hits firms before they’ve made their first pound in turnover, let alone profit — continues to threaten the futures of small firms all over the country.”
One chief executive of a consumer-facing business said that “high streets are being crippled, to the extent that whole communities and whole neighbourhoods will be irreversibly damaged if this isn’t resolved”.
5. Infrastructure
“We want well run roads and rail, and decent broadband,” said Emma Jones, chief executive of Enterprise Nation, which represents smaller businesses.
The BCC wants 1.4 per cent of GDP committed to public investment in infrastructure — exceeding the 1.2 per cent guideline recommended by the National Infrastructure Commission — and targeted at key projects such as Heathrow’s third runway, HS2 and other rail upgrades.
On digital infrastructure, business chiefs widely support the Conservatives’ push to improve broadband speeds.
Mr Cherry said: “It’s critical that the next government gives the economy a much needed shot in the arm by investing in new infrastructure such as broadband and 5G networks.”
