Business leaders responds to Autumn Statement

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Business leaders from across the North-west and nationwide have shared their reactions to 22nd November’s Autumn Statement from the Chancellor of the Exchequer.

Chancellor Jeremy Hunt announced a number of tax cuts and investment plans in the light of the economy having performed better than expected since taking on the position in Autumn last year. A summary of key announcements can be found here.

Businesses have been largely positive of individual policy announcements made the Chancellor’s upcoming statement.

Greater Manchester’s Night Time Economy advisor, Sacha Lord, welcomed the extension of business rates relief for the hospitality sector. Commenting on social media, he said:

“I’m pleased to see The Chancellor has listened and agreed to extend the current Business Rates Relief in todays statement. The extension will allow Hospitality operators a bit of breathing space. We must now work together, in calling for a VAT reduction in the Spring Budget.”

He also, however, acknowledged the additional challengers on businesses in the sector of meeting the upcoming rise to the National Living Wage, adding in subsequent post on X (previously Twitter):

“The rise in minimum wage is fantastic news for millions and well overdue. The [government] aren’t giving you this though, businesses are. Many Hospitality businesses are breaking even/making a loss. A Spring VAT reduction is now needed more than ever, to offset this increase.“

Representing over 170,000 UK businesses, the Chief Executive of the CBI, Rain Newton-Smith, welcomed the opportunities for business presented by full expensing:

“Helping firms to unleash pent-up investment is critical to getting momentum into the economy. Making full expensing permanent will give firms the stability they need to press on with decisions on investment whilst keeping the UK at the top table internationally for investment incentives.

“Moves to speed up planning and grid connectivity should also bolster business confidence to invest in high growth areas like green technologies, renewable energy and advanced manufacturing.”

With Greater Manchester among the local areas set to benefit from a new Investment Zone to support the manufacturing sector, city-region leaders welcomed the additional investment into the area. Andy Burnham, Mayor of Greater Manchester, said:

“The Investment Zone will help us attract investment and create jobs and opportunities that will benefit people across Greater Manchester. Our city-region has been a centre for manufacturing and materials innovation for centuries, from leading the Industrial Revolution right through to the development of graphene, and the Investment Zone will ensure that continues.

“It’s also a vote of confidence in devolution and its ability to deliver levelling up. Providing more flexibility and local control over spending can help unlock Greater Manchester’s potential.”

Subrah Krishnan Harihara, Deputy Director of Research and Information Systems at Greater Manchester Chamber of Commerce, however, took a more cynical viewpoint of the Chancellor’s offers given the context of an upcoming 2024 General Election: he said:

“[T]he Chancellor’s announcements were in the nature of an early pre-election giveaway. The Chancellor has capitalised on the extra fiscal headroom he has. However, with the economy expected to flatline and the cost of living crisis still a live issue, it is questionable how much headroom he will have next spring for his real pre-election giveaways. With today’s announcements, debt is expected to reach 94% of GDP. And if the Chancellor has to resort to increased borrowing to fund other pre-election giveaways, many of his party MPs may not be as willing as they were today to cheer him on.”

Despite support for many policies from business leaders, other organisations have argued support for households does not go far enough to mitigate the ongoing cost-of-living crisis. General secretary of the GMB trade union, Gary Smith, commented:

“Today’s measures go nowhere near fixing the damage this Conservative Government has done to people’s finances.

“The cut to NI will mean just over £150 a year to the lowest paid; a drop in the ocean when mortgages have doubled and energy bills are crippling household finances.“

His sentiments were echoed by think-tank, Resolution Foundation, which estimated households could be £1,900 poorer under plans, and warned that tax cuts were coming at the expense of investment in public services. The organisation’s chief executive, Torsten Bell, commented:

“Well-targeted specifics, addressing problems such as our tax system’s bias against working-age earnings or benefit system’s failure to keep pace with fast rising rents, were juxtaposed with far less well-designed big picture fiscal choices. Tax cutting rhetoric clashed with tax rising reality, and positive steps to encourage business investment combined with a growth sapping hit to public investment.

“Ultimately this reflects the pressures, not only of an upcoming election, but of governing a sicker, older, slower growing Britain, amidst an era of far higher interest rates.”