What does Jeremy Hunt need to do to increase confidence in the economy?

Reduce tax. Particularly, reduce corporation tax to encourage people to innovate and start their own businesses. 26% effective tax, plus withdrawing it, amounts to 40%-50% tax for some micro and small businesses. Hunt needs to reverse the corporation tax increase imposed, or at the very least change the profit level at which it should be paid. Gordon Brown introduced the 10% tax rate, later reduced to 0% and then increased significantly. Hunt needs to do something dramatic like this, as there are a lot of other places in the world where innovators can establish a business and pay less tax.

Lurching from one crisis to another has left world economies reeling, highlighting our co-dependencies and exposing our weaknesses. We’ve lost the essence of robust fiscal planning and replaced it with fiscal fire-fighting. There needs to be a comprehensive approach to restore confidence and pave the way for a resilient economic rebound. We must implement measures to reduce our exposure to the influence and risks of global events. At this stage, it’s like asking the Chancellor to pull a rabbit out of the hat. A focus on job creation, training and adapting to evolving industries is paramount to ensuring long-term economic stability. Embracing innovation and sustainability can steer us towards a more promising future. Achieving this against a backdrop of an increased burden on public services, spiralling domestic debt and a decreased Treasury purse is going to take tough choices.

The best thing Jeremy Hunt can do for the UK economy is to hold his nerve. Businesses must be allowed to fail. Too many UK firms have grown complacent over the past 15 years, getting hooked on cheap money and a growing sense of affluence in consumers, which has largely been paid for on credit. As small business owners, no one is coming to save us. If we're to survive, and create a robust UK economy that will outlast the current incumbent of No. 11, it's up to us to adapt to the situation as it is, not how we wish it was.

Hunt faces a significant challenge in reassuring investors and the public about the strength of his economic policies. Marred by a surge in business bankruptcies, and a slump in GDP growth, the forecasts don't look pretty. With global inflation and high national debt levels, the task of reinvigorating the economy is not straightforward. The previous Budget, largely unfunded, has left a fiscal gap that needs to be addressed. Investors and analysts are calling for a balanced approach, which sadly entails cutting public spending. Nevertheless, there is an acknowledgement that redistributive policies, such as taking from the rich and giving to the poor, will be viewed favourably by the bond market. Hunt's commitment to fund labour supply measures, such as childcare support and welfare changes is going to be promising in addressing key issues that impact workforce participation. Separately, a commitment to full expensing of capital expenditure for 3 years will surely help stimulate growth.

An early election would help, although it's highly unlikely. The PM and Ministers are unable and unwilling to move forward with any long-term plans as they are worried about their short-term political futures.
Aside from that, there should be no tax cuts in this budget. Government borrowing costs have shot up with higher interest rates and the number one priority should be getting inflation down to 2%. This will help rates go down, instil confidence and pave the way for an eventual recovery. If they can do this by this time next year, their electoral chances may well have improved.

The Chancellor really needs to look at immediate ways to help otherwise healthy businesses that are suffering from lack of liquidity due to tightening credit processes and increased delays in payments from debtors. HMRC would be a good starting point. We are hearing from our clients that HMRC have very much toughened their stance on overdue tax bills. Where previously they have been very accommodating with payment plans, we are now hearing of very little flexibility being offered. The fact we are hearing this from a range of clients suggests that someone may be leaning on HMRC to increase taxes received. If HMRC were the collection arm of a business we would say that this was a classic sign that the business was struggling. It is in no one's interest to force otherwise viable businesses to fail when accommodation would allow them to ride the storm.