Yesterday, Chancellor of the Exchequer Rishi Sunak unveiled the contents of his Budget in the House of Commons.
Here’s what a selection of South West and national business leaders had to say…
Phil Smith, Managing Director of Business West
“The Chancellor praised the “imagination and drive” of businesses as key to the continued recovery of the UK economy and gave an upbeat Budget of higher spending and optimistic messaging. But many businesses will remain muted in their enthusiasm given the scale of the challenges they face.
“Avoiding a spending squeeze was important given the fragility of the overall economy and individual firms. However, businesses will have watched the budget with a less resolved question over whether the government will be doing enough to sustain the economy and tackle the significant challenges that businesses still face.
“Many businesses are in a tough period, with Covid recovery needing to be nurtured and companies looking to ‘make up for lost time’ in recouping lost income in the months and years ahead. They also face strong head winds in the face of skills shortages and rising costs, from supply chain and labour market inflation and additional business tax burdens from National Insurance and corporation tax.
“Our region also continued to broadly lose out from the Chancellor’s largesse. With a very long list of individual projects and schemes announced, dominated by northern constituencies and the devolved nations of Scotland, Northern Ireland and Wales. We are still not getting cut through in central government for the support our region needs.”
Ian Larrard, Director of Business West in Swindon
“Swindon failed to win any additional government investments, after the significant announcements made on the targeted Towns Fund in the previous March budget.
“This budget failed to soothe fears that our region continues to lose out compared to others. With a very long list of individual projects and schemes announced, this was dominated by northern constituencies and Scotland, Northern Ireland and Wales.
“The West of England saw some welcome investments in transport, with a headline £540 million in transport investment but most of this money is re-announced from the 2019 Transforming Cities Fund.
“However this investment looks small in comparison to other Northern cities, with Greater Manchester and the West Midlands receiving a billion pounds each, whilst West Yorkshire gets a £830 million. It also means many other critical transport corridors in this region remain poorly served, particularly in comparison to other English cities that benefit from much more comprehensive mass transit systems of bus, rail, and tram/metro.
“Much larger investment and a more ambitious approach to infrastructure is urgently needed. We are disappointed that these needs remain unmet.
“There was some good news in place for Gloucester, which was a rare local example of benefiting from the government’s new ‘Levelling Up Fund.’”
Mike Cherry, National Chair of FSB
“This Budget has delivered some measures that should help to arrest the current decline in small business confidence. But, against a backdrop of spiralling costs, supply chain disruption and labour shortages, is there enough here to deliver the Government’s vision for a low-tax, high-productivity economy? Unfortunately, not. Where inflation and forthcoming tax hikes are concerned, the clouds are gathering.
“Much more will be needed to support small employers in the months ahead. Our call for an increase in the Employment Allowance to £5,000 would have made a real difference to efforts to increase wages, retain staff and create jobs as we head into the critical festive season.”
Michael Blaken, Head of Accounts at Optimum Professional Services
“There seemed very little in the Budget that hadn’t already been announced, that was noteworthy. The measures were generally aimed at helping people on low incomes, or businesses in specific sectors.
“The Chancellor confirmed the increase from April of the National Living Wage and the National Minimum Wage and his ‘rabbit out of the hat’ at the end was to announce an imminent reduction in the Universal Credit taper – which he dubbed a ‘tax on working’ – from 63% to 55%.
“For those middle-income earners, there was very little, other than perhaps the announcement that fuel duty will be frozen.
“Little was said about taxation, other than the Annual Investment Allowance remaining at £1m until March 2023, which is welcome.
“We are interested to see what the planned reforms to business rates will be, and the new investment relief and business improvement relief sound positive, but as is always the case the devil will be in the detail.
“Businesses that have done best out of this Budget are those in hospitality, leisure and retail, which will enjoy a 50% cut in their business rates, and those which can benefit from R&D.”
Martin Gurney, Partner at Haines Watts Swindon
“We would typically spend hours after the Budget writing about the impact of tax changes within the Budget and their implications for our clients. The Chancellor has, to a significant extent, relieved us of this burden!
“In terms of new tax measures introduced, there were very few. The Chancellor has attempted to bolster the struggling Arts and Creative sectors by enhancing the creative tax reliefs available, and similarly tried to help the Retail, Hospitality and Leisure sectors through rates discounts.
“At the same time, he announced a move to expand R&D tax relief to cover cloud computing and data costs, with the focus of R&D relief moved to UK activity, in line with other jurisdictions.
“We already knew about the changes to the rates of corporation tax from 2023, and nothing was done to amend or withdraw these changes, but the Annual Investment Allowance threshold of £1m was extended to 31 March 2023.
“Overall, a very neutral Budget designed to keep the economy stable in times of inflationary pressures and supply chain concerns.
“And finally, tomorrow is promised to no one. The Chancellor did not make any amendments to income tax but he did state his desire and intention to reduce tax rates by the end of this parliament. Watch this space I guess!”
Tom Brennan, TED Mortgages Swindon
“£24bn earmarked for housing, £11.5Bn for affordable housing for 180,000 homes – Hopefully, this will allow more people to be able to get on the property ladder where they are otherwise being priced out. Affordable housing is essential to be representative of society and as it stands there is currently not enough. £5bn to remove unsafe cladding should be a given.
“Inflation is still high, and the cost of living is expected to remain higher through autumn and the winter. With basic living costs increasing people should be looking at what areas they can save money to try to at least limit the impact of the increase on food and energy costs. Reviewing personal spending at a time when costs are increasing will be very important. Key areas to review will be Mortgage Payments, Loans, and credit cards where paying interest and household bills. Shopping around for better deals on these expenses with be time well spent.
“Unemployment is expected to be two million people less than previously feared. This is hopefully a positive indicator that we are coming out of the other side of the pandemic and finally starting to see some light at the end of the tunnel. With the Furlough scheme ending in September, there has been much uncertainty about the ramifications to businesses and employees about their ability to continue in their jobs. People in jobs is crucial for the economy to rebuild and although there have undoubtedly been many people that have been severely impacted by Covid, it is promising to hear that job opportunities are on the increase.”
Emma Carter, Smarter Media
“Great to see the economy is not in as bad a place as we all feared it might be and that our hospitality industry colleagues have much-needed tax breaks, even if it is only for one year!
“Of course, the cost of living remains a concern for most of the population, so it is good to see some steps being taken to address that – though interesting that Rishi referenced the improvements he is making on the last ten years, when it’s the Conservative party who’ve been in power during that time!
“I am really sad to see the delay, once again, in the business rate reform. Many businesses have the drive to invest in further growth, and business rates play a huge part in restricting the cash to allow us to do so. And in light of the recruitment challenges we are facing in the Southwest, I am really keen to understand what the skills investment will actually mean for small businesses like mine.
“On a personal note, I’m really pleased to see the extra monies being allocated to schools for those with SEN and disabilities – the impact of the Pandemic on our children and young adults is significant, and although many schools are doing all they can, there is a definite gap in the lack of resources and skills in helping them recover – though I suspect the amount will be a drop in the ocean compared to what is actually needed.”
