‘110 measures for growth’ was a bold statement from the Chancellor in this year’s Autumn Statement, and it’ll be tricky to scrutinise in full but there were some big announcements this time around. Not least of these was the move to make full expensing permanent, hailed as the single biggest business tax cut in modern British history, that will maximise business investment, increase productivity and boost GDP.
This is very welcome news; it gives tax relief to businesses investing in new equipment, and is predicted to stimulate £20bn of investment per year for the next ten years. There’s no doubt this measure will stimulate investment but the Chancellor was somewhat shortsighted in his suggestion that this would prevent the need for borrowing.
The truth, for many businesses, is that tax is not the only barrier to investment. Tax relief makes it more affordable, certainly, but the reality is there are still many businesses that simply don’t have the working capital to invest in growth. If the Chancellor wants businesses to grow, increase productivity and contribute to GDP, he must recognise that borrowing to invest is a viable business strategy.
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