New Prime Minister urged to act now to save the economy – industry reaction

Business leaders warned Liz Truss on Monday that the new Prime Minister must take swift and bold action on rising costs or the economy will drift into worse territory. The Institute of Directors said members were crying out for clear direction from the Government

Responding to the announcement of Rt Hon Liz Truss MP as the new UK Prime Minister, Jonathan Geldart, Director General of the Institute of Directors, said “We warmly welcome the appointment of a new Prime Minister and hope that we can now move on from the recent political uncertainty that has had a real impact on business confidence.  With businesses facing real difficulties and feeling apprehensive about the prospects for the UK macroeconomy, our members have expressed their concern about the lack of a clear direction. Our data shows that one of the main reasons for low business confidence in the UK economy is political instability, second only to inflation.”

“We therefore look forward to engaging with the new Prime Minister and her ministerial team at the earliest opportunity to continue to push for the policy priorities that will best encourage and foster a favourable climate for entrepreneurial activity and business growth.”

“In particular, with business already facing unprecedented energy and other supply-side costs, we urge the new government to help mid-sized firms in their transition to net zero and reverse the recent hike in employers’ national insurance contributions. Action in both areas would support SMEs trying to grow in very difficult circumstances.”

“To grow the economy, we need to raise all types of investment. We are therefore calling on government to also make the 130% capital super-deduction permanent, as well as use the tax regime to address skills shortages.”

“If changes to corporation tax are being considered, we urge the government to use it to speed up the transition to a low carbon economy and reduce our dependency on expensive fossil fuels. Specifically, we advocate the creation of a ‘wedge’ between the corporation tax paid by those businesses that are net zero and those that are not. This would provide a clear incentive for all businesses to achieve the desired change and would be a huge stride towards meeting this country’s climate change target.”

National Chair of the Federation of Small Businesses (FSB), Martin McTague, said “I congratulate Liz Truss and her team on a campaign that included small businesses, the self-employed and unleashing enterprise at its centre. The challenge now is to deliver action that is big and bold enough to match the scale of the crisis threatening the existence of many small firms, and the jobs, livelihoods and communities which depend upon them.”

“Small firms, not protected by an energy price cap, are seeing bills soaring out of control. This is at a time of sky-high taxes, rampant inflation and supply chain disruption, creating a toxic mix which must be addressed urgently.”

“Small businesses are crying out for a comprehensive response which cuts taxes, limits spiralling bills, and provides direct cash support for the smallest businesses.”

“During the leadership campaign we were pleased that Liz Truss listened to our calls to reverse the recent hike in National Insurance and to look at lifting more small firms out of business rates.”

“As she prepares her full package of emergency plans, we are ready and willing to work with the new Prime Minister and her team to protect the UK’s 5.5 million small businesses and the 16 million jobs within them, in communities in all parts of the UK.”

Sarah Howard, Chair of the British Chambers of Commerce (BCC), said “We would like to congratulate Liz Truss on running a successful campaign to become the UK’s new Prime Minister.”

“She must now take immediate steps to support the economy. The last few months have been difficult for everyone, time is running out and urgent action is needed to deal with the costs’ crisis.”

“We believe the country has already entered a recession and that inflation will hit at least 14% in the months ahead. Like households, firms have been telling us of unsustainable rises in their energy bills and how difficult it is to find new fixed term contracts to buffer against further price hikes.”

“Unless the new Prime Minister addresses these problems head-on then the economy will drift further into dangerous waters and the outlook for both businesses and consumers will be bleak indeed.”

“The BCC set out a five-point action plan to support businesses at the end of August and sent it to the Treasury and Liz Truss’s team. It is now imperative that we see movement on our proposals.”

“The plan is not just about ensuring support for businesses. It is also about protecting jobs, securing livelihoods, and creating a vibrant and prosperous society.”

Dame Clare Moriarty, Chief Executive of Citizens Advice, said “On a daily basis our advisers raise red flags about the situations people are facing: those who are terminally ill and unable to heat their homes, parents going days without food to feed their kids and people unable to afford the bus fare to get to a food or school uniform bank.”

“They describe helping people during this crisis as trying to hold back the tide with a bucket.”

“The cost-of-living crisis is the single biggest problem facing us and the new Prime Minister. Every day that passes without a lifeline being thrown is another day without reassurance for those who are already struggling to stay afloat.”