CMI responds to Spring Statement 2022

Spring Statement 2022: A halfway house between short term economic support and a stronger economy long term.

Responding to Chancellor Rishi Sunak MP's 2022 Spring Statement, Anthony Painter, Director of Policy at the Chartered Management Institute said:

The Chancellor has today delivered a halfway house of plans and measures for the UK. He announced some measures, but not enough as yet, on addressing current economic uncertainty and delivering a stronger economic future. More is still needed to reassure people and industry, particularly regarding shorter term measures on household finances and for businesses on their future and how his ‘People, Capital and Ideas’ approach can deliver.

The Chancellor previously set out his vision for a new culture of enterprise: greater capital investment by businesses, increasing the skill levels of the UK’s workforce and encouraging innovation. Today’s Spring Statement introduces his early plans to invest in people, capital and ideas.

We welcome the long-term strategy conscious that it is still in its relatively early stage.

However, it is critical that the Government does as much as possible to shield households from potentially crippling increases to prices - which risks detracting from long-term aims. There was some help today but with energy price rises remaining high and continued uncertainty from the Russian invasion still more was needed to protect those with lower incomes. This is likely to need re-visiting sooner rather than later.

The rapidly rising cost of living also has a knock-on effect on employers: reducing demand for goods and services at a time of increasing business costs and putting pressure on employees. In the public sector, rising costs create enormous internal pressures as workers, including in the health and care sector, face real wage cuts. All of this distracts from a long-term growth agenda.

The Chancellor’s argument for investment in People, Capital and Ideas is important, and we support his review into the operation of the Apprenticeship Levy. Helping SMEs and others access all-levels, all-age training provision is vital to their growth. Going forwards, further tax and other financial  incentives for businesses and employees will be needed to support high-quality, productivity-enhancing training provision, in the skills the country will need for the future. We also look forward to exploring how the Government’s various skills and training policies, like the Lifelong Loan Entitlement, will be coordinated to deliver impact greater than the sum of their parts.

In the Plan for Growth, the Innovation Strategy, the Net Zero strategy and the Levelling Up White Paper, this Government has highlighted the key contribution that management and leadership skills make to the economy, society and the environment, through encouraging innovative practices, spreading technical skills throughout the workforce, boosting tech adoption, and addressing inequality between places. Because of the centrality of future managers to seeing these agendas bloom, CMI believes that now is the time for the Government to consider a new cross-governmental, whole UK approach to developing the UK’s leadership and management capability. Such a strategy would underpin the ‘people’ element of the long-term plan for innovation and enterprise.