8 July 2020
We welcome the Chancellor’s Financial Statement. Measures such as additional funding for traineeships, money to fund apprenticeships and support for young job seekers via the Kickstart scheme will be essential to aid short-term recovery. However, this statement does not go far enough to tackle the long-term challenges faced by the UK economy, which this crisis has only exacerbated (e.g. low productivity, high dependency on low-skill service sector jobs, regional imbalance, and weak social mobility).
We have missed our first opportunity to help our economy back on a sustainable, sound footing. For example, the VAT cut on food, accommodation and attractions will only encourage relatively limited business and consumer spending in the immediate term. The Government needs a strategy to go further than it is has today and lay the groundwork to drive the long-term economic recovery it promised. This should include giving businesses and investors certainty on the tax and regulatory frameworks over the next two years to support inward investments, directing skills training towards jobs and sectors with real-wage growth potential, and designing appropriate measures to support SMEs and new startups.
Let’s hope the Chancellor doesn’t wait too long to address these challenges or we risk missing the boat to long-term economic recovery.
Andrew Harding, FCMA, CGMA
Chief Executive — Management Accounting
The Chartered Institute of Management Accountants, part of the Association of International Certified Professional Accountants