Today’s Autumn Statement has left businesses at a “cliff edge”, according to the head of one of the UK’s largest business groups. She said the announcement failed to provide them with answers to their worries on energy prices, the labour market and overseas trade.
Shevaun Haviland, the director-general of the British Chambers of Commerce, which represents companies employing almost six million people in the UK, told Spotlight that Jeremy Hunt’s statement had failed to address business’s most pressing concerns.
Rising energy prices are among their chief worries, Haviland said. Measures were announced in September to shield firms as prices rocketed – but those will run out in April. Although Hunt’s announcement today included plans to extend the energy cap for domestic customers for another six months, he made no mention of business customers.
“One of our manufacturers in the north-west has worked out that their energy bills will go from £9,000 a month to £35,000 a month in April,” said Haviland. “They turn over £50,000 a month. They are saying, ‘we are going to have to make three quarters of our workforce redundant or shut the doors’.”
“It’s a cliff edge for businesses,” she said.
Haviland added that Hunt had also failed to address firms’ concerns about the labour market. Figures published on Tuesday (15 November) by the Office for National Statistics showed employers are struggling to fill jobs, leaving 1.2 million roles vacant – which had pushed average pay growth to 6 per cent, its highest since the Covid pandemic.
“At the moment you can’t get a visa if you’ve got less than the equivalent of an A-level,” said Haviland. “Our hoteliers will say, ‘I don’t need A-levels, I need people who have great customer service to run the front desk.’”
Businesses are increasingly concerned by other problems created by Brexit, too, said Haviland – such as a drop in trade with the EU. In the forecasts published by the Office for Budget Responsibility (OBR) alongside the Autumn Statement today, its economists forecast shrinking growth in exports and imports, and said the UK’s “trade intensity” is 15 per cent lower than it would have been without Brexit. “The latest evidence suggests that Brexit has had a significant adverse impact on UK trade, via reducing both overall trade volumes and the number of trading relationships between UK and EU firms,” they wrote.
Haviland was disappointed Hunt did not mention the UK’s relationship with the EU. “There is, in our view, a lot we need to fix with our biggest exporting partner, the EU, and the TCA,” she said, referring to the Trade and Cooperation Agreement, the post-Brexit deal signed between the UK and the EU in December 2020.
“The Northern Ireland protocol is currently an obstacle, we need to fix that,” she said. “We have put up huge obstacles with our biggest trading partner, and wherever I go, businesses are saying to me: it’s just so hard, it’s not getting any easier.” One of her members had told her they had stopped exporting to Europe altogether. “It’s just too difficult.”
Ultimately, she said, “the two big things that businesses are worried about are inflation and interest rates. And we know that we’re not going to see any dramatic changes in those in the next year and a bit.
“We need to invest in this period, so we are in a good position. That involves helping on energy bills, ensuring that we can get the labour we need to grow, and improving relationships with our trading partners.”