In his first Budget, Chancellor John Healey’s Red Book featured a very telling inscription: Breathing space for today – fresh hope for the future. I’m sure that, as a sentiment, this is something we can all get behind. Much of the business community has felt that British politics and policy have been driven too much by short-termism and reactive instincts, making it harder for businesses to plan or decide where to invest.
If I look at some of the best business successes, there are some clear signals – a long-term investor approach, stability at the top in terms of the tenure of the CEO, a board that understands the importance of driving service-led cultures and a balanced scorecard approach to employees, customers, the supply chain and the investor. If we do look at the political environment of the last 10 years, whatever your politics, I think it is fair to say that we have seen too much turbulence, not enough vision, and a spectacular short-term approach which has resulted in more cost and less confidence – whether for overseas investors, UK boards or our customers.
The cost of being reactive
Last week I made the point that predicting the future is a fool’s errand, and that we should instead be mindful and purposeful in our planning.
Just this week, consumer confidence fell 11 points to -24 in October – the sharpest fall outside the pandemic since the 2016 referendum. No single event sits behind it, but people’s perceptions of their own financial situation, the rising cost of living, and the uncertain international situation all play their part – as we have seen in our own UK Customer Satisfaction data.
At the same time, firms appear to have begun to pause spending in response to the policy uncertainty ahead of the Budget. We must hope the Chancellor’s speech on Wednesday marks the start of a period of sustained certainty, at least on the domestic front.
With defence spending set to increase, and public financial institutions (PuFins) such as the British Business Bank and National, let’s hope this translates into greater certainty for UK businesses who badly need it. Boards, especially at retail and hospitality businesses, will also be hoping the cost-of-living measures announced on Wednesday will help arrest falling consumer confidence.
In search of a Service Nation fit for the future
Time will tell whether this Budget delivers both breathing space and hope. The CEOs I speak to are typically fear fast changes of direction, without sufficient warning, which make it harder to plan and boost long-term growth. So in that measure, perhaps the Budget has succeeded.
As a Service Nation, we must now keep our resolve and remain focused on our customer strategies, while taking encouragement from what this week sought to achieve: short-term respite and a plan for long-term prosperity. While this Budget was limited in the extent of upheaval, perhaps that most of all is what we needed.
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