Essex: ICAEW chief challenges Chancellor to encourage investment

THE Chancellor needs to help “unlock” the estimated �60billion currently sitting on corporate balance sheets to help kick-start the economy, the head of a leading accountancy body said during a visit to the region.

Despite a better-than-expected growth figures for the third quarter of the year earlier this week – with GDP rising by 0.5% in the three months to the end of September, up from just 0.1% growth in the second quarter – there are fears that the economy could still go into reverse, particularly in view of the continuing debt crisis within the eurozone.

But Michael Izza, chief executive of the Institute of Chartered Accountants in England and Wales (ICAEW), believes many businesses are doing better than surveys suggest, and are in a position to invest for growth given the confidence or incentive to do so.

Mr Izza was speaking during a one-day tour in Essex, which included visits to Tiptree jam maker Wilkin & Sons and the Ford Motor Company site near Basildon, either side of a lunchtime meeting with local ICAEW members in Chelmsford.

He regularly travels around the country to keep in touch with members, and said such visits were particularly relevant just now, to help inform the institute’s submission to Chancellor George Osborne ahead of his Autumn Statement at the end of this month.

“Sentiment and confidence are very low but when you actually talk to businesses about how they are doing quite a lot are saying that they are doing OK, but they are nervous about what might lie around the corner – particularly among firms involved in exporting to the Eurozone,” he said.

Businesses were also concerned about the availability of lending and wanted to be in control of their own destiny, with the Bank of England estimating that around �60billion is currently sitting on corporate balance sheets

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If companies could be persuaded to invest any significant part of this balance, it could be a “significant catalyst” for the economy, substantially greater than the Government grants announced earlier this week, said Mr Izza.

ICAEW research on how these balances could be unlocked was due out later this month, around the time of the Autumn Statement on November 29, he added.