A Budget of Mixed Messages

It’s that time of year, the time of year where look at the budget for next year, our aspiration and our concerns. Not at government level but in boardrooms up and down the land in companies big and small. So how did the budget that emerged from similar meetings reflect the challenges we are seeing in the boardroom?

The Autumn statement was a curious mix of ra-ra whilst also leaving a hand on the door handle in case of need of escape, raising headline expectations but subtly in much of the small print a series of yes buts!

The headlines were around tax grabs and tax thresholds, robbing the rich to give to the poor….and the rich!! High profile issues such as the NHS as we enter Winter and Potholes as we navigate ever deteriorating roads. But the critical issue is whether this budget was in step with real boardroom budget setting.

Early indications suggest that many businesses see 2019 as a year of change and uncertainty. There are no indicators for long term economic decline indeed the OBR has upgraded its forecast but in a digital age where trends change in a heartbeat companies have to maintain an outward sense of optimism and an inner focus on measured prudence. To this end the budget has tried to create a sense of boost which will be welcome but in many ways in creating a sense of giveaway flies slightly counter to prudence.

The early raising of tax thresholds will offer a little ease against growing wage demands. Business relief for retailers will buy a small amount of time but two years is really not long enough to reset businesses to become more agile and resilient to a changing consumer landscape.

In the small print there are one or two hidden gems. The reduction in the employee contribution on apprenticeships amongst small businesses is very welcome and perhaps mirrors both the need to resource this growing part of the economy but also the realistic affordability within small and micro businesses.

Public service investment still needs to be addressed. When the NHS was established it was a labour intensive offer but today leading edge technology and groundbreaking therapies means the financial demands on the service are probably unlikely ever to be matched by a truly public service.

So as we look forward to Christmas let’s hope the chancellor gets the Xmas present he most wants, a Brexit that allows him to deliver this budget.

 

Posted: Thursday 1 November 2018


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