October 12th, 2016
A word has crept gradually into the public consciousness in 2016, which provokes various notes of caution and concern for a UK public watching the aftermath of the referendum unfold. Leading up to the vote uncertainty appeared to drive voters one way or another in the lead up to June 23rd. Without a clear set of facts to follow, seemingly bamboozled by a raft of opaque arguments on the benefits and pitfalls of remaining or leaving, many members of the public struggled with the ever increasing uncertainty the decision presented.
Since the UK agreed to exit the EU in the early months of the summer, uncertainty has taken hold even further. Political in-fighting, a prime minister left with no other option than to quit and an absence of would-be leave campaigners appearing to lack the ability to inspire sufficient support to drive their mandate forwards, has left bystanders in the public gallery wondering just what the plan is to prevent the UK slipping into a further recession.
Last week the new Chancellor, Philip Hammond, presented his personal vision for the UK economy during a speech to the assembled Conservative party conference members. In it, Mr Hammond provided some initial hints of what would be in store for contractors working in the UK when he reveals his first budget in November.
In reference to the budget and his plans for an overhaul of the economy, Mr Hammond dedicated a considerable amount of his speech to confirming that he would provide “an economy that works for everyone.” This goal was apparent throughout the speech, suggesting that the chancellor and the Government are all too aware of the view of the voting public.
Mr Hammond referenced uncertainty on many occasions, stating that he wanted to instil a sense of “long-term fiscal sustainability, while responding to the consequences of short-term uncertainty.” Perhaps most heartening for many IT based contractors was the points he chose to make around raising support for “new, disruptive technologies”, with a clear focus to using the IT and AI industries to improve the fortunes of the UK economy.
In order to secure this goal, Mr Hammond clearly realises the need to maintain the UK as an attractive destination for foreign nationals to move to in order to further their careers. He confirmed within the address that it was a priority to confirm the UK’s “ability to attract the brightest and best to work here in our high-tech industries.”
To be able to provide that reassurance, Mr Hammond will need to present corporate entities with the promise of a profitable landscape to continue maintaining premises in Britain. No specifics were outlined during the course of his speech, aside from a note that corporation tax would likely be adjusted to 17%. Whether he will provide a clearer assessment of his plans for large business in the Autumn budget remains to be seen.
As a minor nod to such businesses, Mr Hammond pointed to the vote to the leave the EU as a catalyst for the uncertainty that currently pervades the markets. Mr Hammond pointedly remarked that businesses “hate uncertainty.”
In a bid to provide a measure of reassurance, Mr Hammond talked about enabling the service industry to receive “the best possible access to European markets”, while also addressing the need for “the best possible freedoms for our entrepreneurs. We are ready to provide support to British businesses as they adjust to life outside the EU.
“We’ve already guaranteed the funding for projects signed prior to this year’s Autumn Statement.”
As a final note on the Government’s plans to encourage continuing investment in UK business, the chancellor confirmed, “The treasury will offer a guarantee to bidders whose projects meet UK priorities and value for money criteria that if they secure multi-year EU funding before we exit, we will guarantee those payments after Britain has left the EU.”
Article by: Simon Butler, Associate Director at Contractor Mortgages Made Easy
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