Business leaders give mixed reaction to Spring Statement

The Confederation of British Industry’s chief economist Rain Newton-Smith said the forecast downgrade brings the “danger of no deal to the UK economy sharply into view”.

Edwin Morgan, interim director general of the Institute of Directors, said crashing out of the EU would “wreak certain havoc for many firms”, but urged against being “lulled into thinking an exit deal alone is a substitute for providing a real economic impetus”.

Ms Newton-Smith said: “Against a hugely uncertain political backdrop the Chancellor has made an admirable attempt to set out a long-term vision for the UK economy, yet remains shackled by Brexit.

“This year’s forecast downgrade brings the danger of no deal to the UK economy sharply into view. It must be avoided.

“Meanwhile, space must be found for the UK’s domestic agenda. Standing still while the world continues to turn is not an option.

“The Chancellor’s rightly identified the need to go further and faster in combating climate change. His ambition for all new homes to be heated sustainably will ensure we make better progress towards a zero-carbon economy.

“Prompt payment practices are good for businesses throughout the supply chain, so if reporting encourages better behaviour from firms that should be welcomed.

“However, going it alone on a digital services tax is high risk, especially at a time when the UK already looks increasingly isolated.

“The EU has dropped their plans and got behind the OECD’s (Organisation for Economic Co-operation and Development) efforts - the UK should follow suit. The Government needs to be doing all it can to encourage investment in the UK and adoption of new technologies, not putting up barriers.”

Mr Morgan said the Spring Statement would “barely register” with most business leaders as Brexit uncertainty “continues to cast a shadow over their organisations”.

“Warm words and proposed consultations are not enough for businesses at a time when confidence is rock bottom and investment plans are eroding away, and many will find it difficult to tread water until more decisive action at the autumn Budget.