How can a government characterised by abrupt U-turns drive the country forward?
With Liz Truss having resigned after only 50 days in power, the Autumn Statement looks less likely than ever to inspire the confidence and leadership the country is so direly lacking. Having recently been moved from Halloween to 17 November, it seems to be the perfect example of a party plagued by uncertainty.
As Britain finds itself recovering from a financial freefall, facing the threat of rolling blackouts and with businesses, charities and households burdened by mounting expenses, the Conservative government must put party politics to one side or risk an economic catastrophe.
In an eventful PMQs last week, Labour leader Kier Starmer accused the now ex-Prime Minister, Liz Truss, of indulging in “fantasy economics” and steering the nation towards “disaster”. After being the third consecutive leader installed without an election - having been chosen by the Conservative leadership, which represents a mere 0.3% of the total UK electorate - stability is sorely lacking.
Unless the Autumn Statement (and indeed the new leader, Rishi Sunak) addresses glaring inadequacies, they seem doomed to drive us in ever-depreciating circles. Here’s the full breakdown of what my colleagues at Duncan & Toplis consider the key concerns for businesses across the UK.
Keith Phillips, Head of Transport, Haulage and Logistics:
"The transport and logistics sector has come to terms with the difficult loss of many foreign drivers after the decision to exit the EU, but it’s by no means out of the woods yet. The staggering rises we’re seeing in fuel costs have made the viability of haulage as an industry very challenging - and one that can’t be circumvented without real, definitive government support.
With inflationary pressures putting strain on employers in the sector, we need continued support to ensure the training of hauliers up and down the country. We also need clear guidance on what changes to taxation we can expect to help logisticians cope with an already uncertain environment.
In particular, I’m sure haulage firms across the UK are anxious to know if the HGV levy will be extended beyond the current end date of July 2023 - and whether further financial support is likely to be announced to prop up this fundamental tenet of British infrastructure."
Kay Botley, Head of Healthcare:
"The healthcare sector has been staggered by the impact of the last two years and, while there has been some support, such as the financial plans put in place to ensure funding for GP surgeries through to March 2024, they were very much of their time. The predictions don’t account for the huge rise in inflation we’re experiencing ,surging energy prices or higher salary increases, so they are essentially not fit for purpose and need to be revised in line with real-time spending to be of any real value.
While we can all do our part in protecting vital front line services, such as accepting seeing nurse practitioners and other highly trained healthcare professionals rather than GPs or contacting our GPs and healthcare professionals via digital appointments to free up more slots for those who require physical examinations, the sector will be hard-pressed to manage any further funding cuts than it already has.
With hospitals facing a £2m a month real-term increase in energy bills, the government must underpin support for crucial healthcare services, or those who need it most will almost certainly see services cut as a result."
Simon Shaw, Head of Property and Construction:
"One sector that seems to have borne the weight of Brexit and the pandemic particularly well is the construction industry, but we’re now seeing growth begin to slow.
With mortgage interest rates as high as 6%, the highest we’ve seen for many years, and many construction firms in the house-building chain suffering from increased supply and labour costs, the government must act decisively.
Uncertainty is especially dangerous and now more than ever, consumers need confidence, so the Autumn Statement must lay out any potential tax increases or cuts and let the markets adjust accordingly - but they must be clearly informed for this to be viable."
Heidi Thompson, Head of HR and Payroll:
"Employers have had a tough couple of years, having dealt with The Great Resignation induced by covid, Brexit and other market factors, so they are arguably among the best prepared for further market uncertainty. Many have implemented robust plans for improved engagement, employee experience and are valuing mental health as much as physical health, which is crucial to drive retention and attract talent.
However, with increasing industrial action across sectors and many employees asking for real-term wage increases to align with inflation, employers need to remember that they do have options. The best thing for employers to do in the current climate is to engage with their employees, be transparent and open about what they can (or can’t) give, and prioritise the benefits that employees themselves identify as being the most crucial and can help with costs, such as flexible or remote working.
Long-term fiscal support will be needed for employers across the country to continue supporting the delivery of key services, so I’m hopeful that the Autumn Statement will lay out firm long-term financial plans to help businesses who, let’s face it, don’t have bottomless pockets."
"The leisure, hospitality and tourism sector is heading towards one of the steepest declines of any UK industry, as households and businesses prioritise essential services over travel or recreation. With inflation now in double digits at 10.1%, larger energy bills and increasing mortgage payments, it’s only logical that families have less disposable income, but the knock-on effect of this is being less able to go out, socialise and, critically, unable to re-inject capital back into already struggling businesses.
The government must identify the leisure sector as being among the most vulnerable of markets and prioritise protection for valuable recreation spaces across the UK. Businesses may have to consider altering their opening times to spend less on lighting and heating, with business owners asking themselves ‘can I afford to stay open?’.
Pubs are likely to be among the hardest hit in the sector, and with 46,800 pubs across the UK, many will risk losing their local to an unviable economy unless the new prime minister Rishi Sunak implements a robust raft of protective measures. Unless they have considerable equity, or unless the latest iteration of the government steps up, it’s likely to be a winter of discontent across the UK."
"Charities are deeply rooted in the economy and wider society, in terms of education, wealth, social services, food banks, food distribution, services for disabled deaf and blind - the list is endless. Charities touch the country in so many ways, and the sector looks set to be hit very hard indeed.
I’m sure a lot of trustees will be very concerned, especially with the Energy Bill Relief Plan only being in place until next March - after which point many charities will likely be left to fend for themselves.
There are three immediate ways that charities will be impacted by any potential cuts that could be announced in the Autumn Statement.
Firstly, a lot of them are reliant on providing their services in receipt of local government and local authority funding. Those contracts generally come up for renewal every three to five years. Obviously, those negotiations are going to be tougher at a time when charities are facing increased costs and reduced income from donations.
Secondly, the wider cost of living crisis has already caused an increased demand for many charities’ services. There are some people who may feel that the government is outsourcing their economic and societal responsibilities and the charity sector especially is having to increasingly pick those up and provide critical services without the essential funding that it hinges on.
The third is in the economy. A lot of charities keep their reserves in investments, so with the fluctuating value of investments and the pound and inflation in double digits, many trustees are likely to be acutely concerned and may have to look at their investment policies accordingly. While the pound shows early signs of recovery in the wake of Truss’ resignation, there is a long way to go to reassure charities across the UK that help is coming."
"The academies sector doesn’t often get a lot of attention beyond its own bodies, but with industrial action on the rise and many teachers burnt out from having to contend with an incredibly volatile two years, the sector needs help to ensure that teachers don’t look elsewhere for jobs that pay more, with arguably less stress.
Schools can’t simply push up salaries to solve the problem, as they themselves will be struggling to reconcile rising costs on all fronts, especially in regard to energy bills and core supplies.
The education sector feels forgotten and with a recruitment crisis in danger of spiralling out of control, the government will need to step up and protect those teaching the next generation of the workforce - or risk significant problems further down the line."
"The consensus from the Duncan & Toplis team is clear: whatever sector you’re in, business, consumers, taxpayers, employers - everyone needs certainty. We’re calling on the government to stop fantasising and fix this farce in the only way that’s viable: by offering clear and consistent support for businesses who are facing a woeful array of service cuts."
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