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You can find the current article at its original source at http://www.theguardian.com/business/blog/2016/jan/21/davos-is-important-but-spare-a-thought-for-bedrock-businesses-back-home
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| Davos is important but spare a thought for bedrock businesses back home | Davos is important but spare a thought for bedrock businesses back home |
| (7 months later) | |
| This week the great and the good have converged on Davos for the annual World Economic Forum. As they seek to divide and conquer the world between them, it is worth sparing a thought for businesses that are the backbone of the economy, fighting to grow and thrive. | This week the great and the good have converged on Davos for the annual World Economic Forum. As they seek to divide and conquer the world between them, it is worth sparing a thought for businesses that are the backbone of the economy, fighting to grow and thrive. |
| Amid an increasingly uncertain global outlook, a softening domestic economy and some disappointing policy decisions here at home, it is these bedrock businesses –not just the global elite – who should be front of mind. Confidence is essential to economic growth. Low interest rates and stable governments over the last few years have helped to reassure both UK firms and external investors that it is safe to invest, take risks, and pursue new opportunities. | Amid an increasingly uncertain global outlook, a softening domestic economy and some disappointing policy decisions here at home, it is these bedrock businesses –not just the global elite – who should be front of mind. Confidence is essential to economic growth. Low interest rates and stable governments over the last few years have helped to reassure both UK firms and external investors that it is safe to invest, take risks, and pursue new opportunities. |
| However, global events and stock market jitters are threatening to undermine business confidence, with potentially far-reaching consequences. The divergent actions of major central banks – with the US Federal Reserve edging rates up and the European Central Bank reducing them – are likely to add to this uncertainty. So while our politicians mix with celebrities and global CEOs, discussing matters such as the refugee crisis and climate change, it is imperative that the UK government does not get distracted from the more mundane, but no less critical, issues that threaten business success. | However, global events and stock market jitters are threatening to undermine business confidence, with potentially far-reaching consequences. The divergent actions of major central banks – with the US Federal Reserve edging rates up and the European Central Bank reducing them – are likely to add to this uncertainty. So while our politicians mix with celebrities and global CEOs, discussing matters such as the refugee crisis and climate change, it is imperative that the UK government does not get distracted from the more mundane, but no less critical, issues that threaten business success. |
| The PM and chancellor need to come back from Davos and focus on how both global and domestic factors are impacting the prospects for the multitude of businesses who make up the economy. British firms are at a crossroads. After a period of sustained growth, we need a renewed focus on fixing the fundamentals to create a business environment that supports continued expansion. What happens at Davos is ultimately far less important than the tough choices that remain unresolved back at home. | The PM and chancellor need to come back from Davos and focus on how both global and domestic factors are impacting the prospects for the multitude of businesses who make up the economy. British firms are at a crossroads. After a period of sustained growth, we need a renewed focus on fixing the fundamentals to create a business environment that supports continued expansion. What happens at Davos is ultimately far less important than the tough choices that remain unresolved back at home. |
| The UK needs to see swift action from the government on infrastructure investment before a lack of capacity stifles business productivity. The delay over a decision on airport expansion is a prime example of how politics has been put before what’s best for growth, leaving us in a situation where airport capacity has not matched growth in demand and is a drag on our economy. | The UK needs to see swift action from the government on infrastructure investment before a lack of capacity stifles business productivity. The delay over a decision on airport expansion is a prime example of how politics has been put before what’s best for growth, leaving us in a situation where airport capacity has not matched growth in demand and is a drag on our economy. |
| The government also needs to further reduce the tax and compliance burdens on UK firms. It is long past time to deliver on promised reform of the outdated and cumbersome business rates system, to enable firms to focus on the work at hand and to encourage re-investment in new staff and equipment. Improving access to non-equity capital is also vital to helping businesses to invest in growth and expanding their operations. | The government also needs to further reduce the tax and compliance burdens on UK firms. It is long past time to deliver on promised reform of the outdated and cumbersome business rates system, to enable firms to focus on the work at hand and to encourage re-investment in new staff and equipment. Improving access to non-equity capital is also vital to helping businesses to invest in growth and expanding their operations. |
| We also face a growing skills gap exacerbated by the failure to adequately prepare young people for the workplace, causing businesses to look overseas in search of the skills they need. When it comes to confidence and investment the apprenticeship levy, pensions auto-enrolment and the national living wage are further adding to uncertainty and business costs, at a time when business needs to invest for our economy to thrive. | We also face a growing skills gap exacerbated by the failure to adequately prepare young people for the workplace, causing businesses to look overseas in search of the skills they need. When it comes to confidence and investment the apprenticeship levy, pensions auto-enrolment and the national living wage are further adding to uncertainty and business costs, at a time when business needs to invest for our economy to thrive. |
| Big summits like Davos have their place but they don’t change the growth prospects for businesses back home. At the current time, our leaders cannot afford to take their eye off the ball. Too many politically difficult but important decisions have been put off for too long, and instead of looking to win international approval the PM and chancellor should concentrate on weatherproofing the UK economy before the storms hit. | Big summits like Davos have their place but they don’t change the growth prospects for businesses back home. At the current time, our leaders cannot afford to take their eye off the ball. Too many politically difficult but important decisions have been put off for too long, and instead of looking to win international approval the PM and chancellor should concentrate on weatherproofing the UK economy before the storms hit. |
| John Longworth is director general of the British Chambers of Commerce | John Longworth is director general of the British Chambers of Commerce |