What London business needs from this year’s Budget

The forthcoming Spending Review will be launched against a backdrop of increasing uncertainty, so it’s vital that this Budget sets out polices to get our economy firing on all cylinders. 

We’ve written to the Chancellor on behalf of London business, urging him to create the right conditions for critical investment in business priorities: skills, housing and infrastructure.

Skills: powering jobs and growth 

With just over 150 days until Brexit and no deal in place, we’ve reiterated our members’ key message: access to skills remains the priority concern. It’s critical that our post-Brexit immigration system allows business to continue to access the people it needs from overseas – at all skills levels. Our proposal, drawn together with input from over 200 leading employers, sets out a clear plan for government to achieve this under a fair and managed system. 

Many sectors are already experiencing skills shortages, so the Chancellor’s recent apprenticeship levy announcements were a boost for London business. Our Skills Action Plan called for three of the announced changes: up to 25% of the Apprenticeship Levy to be spent in supply chains, for proper consultation with business, and for the Institute for Apprenticeships to be properly resourced to bring new standards to market. We look forward to working with the government to ensure the levy works to deliver the skills business needs and boosts apprenticeship starts. 

At the same time, however, further education colleges must be appropriately funded so they can gear up to take on a bigger role in training and upskilling our workforce, and more control over skills funding and policy should be devolved to the metro mayors.

Housing: unlocking private sector investment 

We’ve welcomed the government’s announcement that it will remove the local authority borrowing cap. Yet even optimistic estimates of the number of new homes this will support is just a dent in the number of homes Londoners desperately need. 

Our Hard Choices report found a £20 billion funding gap standing in the way of the government’s ambition to build an additional 300,000 homes a year. Bridging this gap needs to be a central priority of the Spending Review. And this must be supported by releasing more land for development, and supporting better ways of building.

Turning the National Infrastructure Assessment into action on Crossrail 2 and Northern Powerhouse Rail

The recent National Infrastructure Assessment (NIA) set out a clear long-term strategy for the UK’s economic infrastructure. It recommended funding for major priority schemes like Crossrail 2 and Northern Powerhouse Rail, alongside improvements to urban transport, digital and new water infrastructure. It rightly supported investment in regional cities in addition to — rather than instead of — investment in London, echoing our Growing Together message. 

We’ve encouraged the Chancellor to follow this through in the Budget, namely by adopting the NIA’s programme of recommendations as policy, including progressing Crossrail 2 and Northern Powerhouse Rail. This would send a clear signal to cities and businesses across the UK to drive ahead with planning for essential new projects, and to invest in the skills required to deliver.

Business rates: supporting the capital’s high streets 

We’ve urged the Chancellor to move to annual revaluations, which would minimise the shocks to business who see their rates bill increase, also calling for regional devolution and a decoupling of business rates. This would allow London government to retain the rates levied here, meaning London business would no longer see its bill rise if values have fallen elsewhere.

Thinking outside the red box

Beyond the Budget, we’ll continue to make the case to central government for getting our capital Brexit-ready, particularly in the run-up to the Spending Review. 

Above all, we need a deal that preserves the benefits of the single market, keeps our borders open for trade and goods, and delivers a fair and managed immigration system open to global talent. With five months to go and no deal in place, we’ll amplify this message loud and clear over the coming months.