Chamber Matters - 14th March 2018
It has been a strong start to 2018 both locally and nationally. This is reflected in the Chancellor’s statement with annual growth being revised upwards slightly. The Chamber’s Quarterly Economic Survey also records a strong start to the year with orders up both locally and exports. This demonstrates that businesses are working as hard as they can to create wealth for individuals, companies and the country as a whole. However, this bright picture is outshone by performances elsewhere in the world. Before the Brexit vote, the UK was the fastest growing economy in the G7 group of key economies. Now even the supposedly basket case Euro economies such as Spain and Portugal are growing faster than the UK. The country is now locked into the slow lane in respect of growth as it is only projected that the economy will grow by 1.3% in both 2019 and 2020.
The Chamber welcomes the good progress made in controlling the deficit. However, it has joined with the British Chambers of Commerce in asking the chancellor to resist calls to pour money into politically attractive, short-term spending priorities. Any headroom which the Chancellor has must be used to leaving a lasting mark on the UK’s infrastructure and to attract investment. This is particularly important with the country facing the challenges and changes of Brexit. The priorities for Devon Chamber Members are improving digital connectivity and delivering road and rail improvements. On rail, the Chamber is highly concerned about the Transport Secretary’s statement that Dawlish resilience is his highest priority than not to announce any spending to do the necessary work.
On business rates, the Chamber welcomed the announcement that the Chancellor has listened to businesses calls to make re-valuations more frequent. However, it will be essential to ensure that any revaluation really responds to the economic reality. The part of the local economy that is struggling the most is the city centre and retail businesses. One of the greatest challenges for retailers in the city centre is business rates.
The other area which is challenging is productivity growth. The only way that higher wages can be afforded and stagflation avoided is improving productivity. Yet productivity growth is hampered by the deep-rooted problems in the economy from the skills gap to chronic underinvestment in the UK’s infrastructure.