To do this, we need to slash the cost of employment. Reducing the burden of employers’ National Insurance Contributions is the place to start, whether by boosting the Employment Allowance for small firms, or lifting the threshold for payments.
Action on this front can’t wait any longer, directors are already making workforce plans for the months ahead. The Government should look to get on the front foot in other areas too.
Business investment was always going to suffer in a situation like this, with so much uncertainty, and the Treasury should act to foster more positivity. Giving SMEs more tax relief for spending on digital technology is an easy win, particularly as so many look to grapple with home-working.
Another area needing attention is skills. The current working environment puts all the more pressure on not just companies’ digital capabilities, but also their management practices, an area where the UK has lagged behind for a long time.
Another area needing attention is skills. The current working environment puts pressure not just on companies’ digital capabilities, but on their management practices too, and this is an area where the UK has long lagged behind. While the PM’s speech on further education yesterday was promising, it didn’t address this key area.
With its Winter Economic Plan, the Government showed that while it still wants to support many jobs and companies, the extent of this support is being reduced – with significant implications for many companies and the wider economy.
If this is its approach, it needs to think carefully about how it can reduce the risk of significant collateral damage and a less certain business recovery. Throughout this crisis, the Treasury’s greatest strength has been its flexibility and willingness to continue updating its tactics. Business leaders will hope this remains the case in the months ahead.
Jonathan Geldart is director general at the Institute of Directors, a business organisation for company directors, senior business leaders and entrepreneurs.