The Institute of Directors (IoD) has urged the Chancellor to issue Brexit planning vouchers for businesses in the upcoming Budget, as a new survey reveals directors’ confidence in the economy has fallen steadily over the past six months, with the UK’s uncertain trading status with the EU becoming the leading concern for the first time in 2018. Help to prepare for leaving the EU was the top ask from directors, with a majority calling on Philip Hammond to make it the priority in his Budget statement at the end of November.
Under the IoD’s proposed scheme, small and medium-sized businesses could submit online applications for immediately redeemable vouchers to purchase legal and professional advice in order to be as prepared as possible for Brexit, whatever the outcome of negotiations. The scheme would be in place for the duration of any transition or adjustment period.
Over half of IoD members say they would be likely to take advantage of financial support to help with their preparations, and voucher systems have precedent in the Netherlands and Ireland. A grant of between £2000 and £3000 based on the InterTrade Ireland and Enterprise Ireland rebates could be spent on Brexit-related advisory services from approved suppliers.
With the survey also showing business leaders’ investment outlook at its lowest point in over a year, the IoD also used its Budget submission to call for the Chancellor to drive productivity growth through investment incentives and skills initiatives, alongside broader support for business costs.
Stephen Martin, Director General of the Institute of Directors, said:“A Brexit voucher system would help smooth over the inevitably difficult adjustment period firms will face over the coming months and years. More government guidance and advice would be welcome, but for smaller firms in particular, the need is for help to work out their individual exposure to changes that come with Brexit, and the specific measures they can take to adjust.
“The Budget must also pull out the stops to get investment, which has been stubbornly weak over the past two years, up and running again. While business confidence undoubtedly takes a cue from the negotiations, we could still make a tangible difference by revamping capital allowances.
“But with so much of the political gaze focused on Brussels, the Chancellor must find the far-sightedness to look beyond Brexit. The UK’s poor productivity growth is not helped by Brexit uncertainty, but it began well before the referendum. Skills provision, business support, and infrastructure all require thorough reform, and we must not wait to grasp these nettles.”