North-west business leaders react to 2024 Budget

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Following the Chancellor’s 2024 Budget announcement on 6th March, business and political leaders from across the North-west and nationwide have shared their reaction to its contents.

While many individual measures have been welcomed, the business community has had a mixed reaction to the Budget as a whole.

Chancellor announces range of tax changes in 2024 Budget

The Mayor of Greater Manchester, Andy Burnham, welcomed the extension of the Household Support Fund for local councils, but was otherwise unimpressed by the bulk of the Chancellor’s announcements:

“The Chancellor deserves some credit for extending the Household Support Fund in today’s Budget. As Metro Mayors we joined more than 170 councils in calling for an extension to the Fund, which has been a lifeline for thousands of people in Greater Manchester during the cost-of-living crisis.

“There were also further positive announcements on devolution, with a trailblazer deal for the North East and steps towards devolution in regions in the South.

“But this Budget failed to acknowledge or address the national emergency in the state of local government finances. Instead, the Chancellor chose tax cuts that will ultimately be paid for by further drastic cuts to public services. The consequences are severe – for communities both in Greater Manchester and across the UK – and our most vulnerable residents will be hardest hit.”

Phil Hitchen, managing director of Stockport-based bus and coach hire company Belle Vue Manchester, recognised how the the Chancellor’s announcements would offer some small benefits to to those in his industry, and said:

“The cut in national insurance will save the average coach driver around £400 a year, while for small businesses and start-ups in our sector the VAT threshold increase is an advantage, but only to operators who use smaller minibuses, as coach hire is zero-rated.

“The new earnings threshold for child benefit is a bonus to some people.

“I can appreciate how some of the opposition see the Budget as ‘more and more’ for ‘less and less’.

“Overall, in my view, it was not a particularly exciting announcement.”

Adam Owens, Director of Tax Advisory, at the Xeinadin Group of accountancy firms, which includes Stockport’s Hallidays, acknowledged the tax cuts on offer but noted that a General Election “clearly loomed large”. He said:

“Today’s Spring Budget was surprisingly bold. Despite limited fiscal room for manoeuvre, the Chancellor was nonetheless able to fund several welcome tax saving measures for small businesses and workers alike.

“Highlights include a further reduction in national insurance cost for employees and the self-employed (at 2p in the pound), and an increase in the threshold for the high-income benefit charge (from £50,000 to £60,000). Additional recovery loan support for smaller businesses was announced, as well as measures to assist hospitality, and pubs in particular, which will be greatly welcome for those operating in this challenging sector. The increase in the VAT registration threshold – from £85,000 to £90,000 – is a positive step, albeit we might have hoped Hunt to have been more adventurous with this.”

One sector which had been particularly vocal in calls for more adventurous support is hospitality, which has long been campaigning for VAT relief, similar or going further than support during the Covid-19 pandemic, in light of rising costs and a fall in custom as a result of squeezed household finances.

Sacha Lord, Greater Manchester’s Night Time Economy Adviser, hit out on X (formerly Twitter) at the lack of support for the troubled hospitality sector:

“The last 5 years has seen a complete destruction of the Hospitality industry, so todays [sic] lack of support is no surprise and another poor decision.

“In this election year, the industry must keep standing together as one to press all political parties to include greater support in their manifestos and bring us in line with our European counterparts. Our sector is not only becoming unrecognisable, but the resulting job losses the current downturn is causing are devastating.

“The continuation on the scale of losses we’ve already seen, will very soon become difficult for our economy to withstand without serious implication.”

The Campaign for Pubs was even more scathing of the Budget’s offer for the sector, and described the Chancellor’s remarks about supporting the sector as ‘paying empty lip service’ to the industry. Paul Crossman, Chair of the Campaign for Pubs and a publican in York said:

“Desperate pub operators will have been appalled today to see the Chancellor shamelessly claim to “support The Great British Pub” while delivering nothing at all in the way of meaningful support. It will be entirely apparent to the Chancellor that the entire pub and hospitality industry is now in deep crisis, with daily business failures occurring in all parts of the supply chain, all over the UK. Yet today he openly spurned united calls for substantive intervention, particularly in regard to VAT and business rates.

“The reality is that high street footfall and consumer spend has fallen through the floor due to the government’s own Cost of Living crisis, while supply costs continue to spiral due to multiple well-documented factors which also have arisen on their watch. The economic situation has left thousands of UK pubs and associated businesses staring down the barrel of permanent closure, and many will have been hoping against hope for some real eleventh hour help from this Budget.”

Overall, businesses and other commentators have broadly interpreted many of the Chancellor’s announcements as attempting to smooth the way for an upcoming General Election.

Subrahmaniam Krishnan-Harihara, Deputy Director of Research at Greater Manchester Chamber of Commerce, concluded:

“Today’s Budget could well be the last fiscal statement from the present government and Jeremy Hunt delivered one his longer speeches lasting nearly an hour and 10 minutes. There were some new measures but there other previously announced measures such as disclosure requirements for pension funds, additional investment in R&D and measures to increase public sector productivity that were also included. Some taxes have been cut while other tax relief measures have been abolished. Government departments and local government will need to find savings and here is where our big concern is. It is vital to consider the consequent impact on public services. Apart from those areas which have protected budgets, public spending is highly likely to decrease in the rest of this decade. Government departments and local government will need to find savings. Perversely, that could also raise another form of taxation – council taxes. The Chancellor has himself acknowledged that the aim to boost UK productivity and unlock business investment need good public services.

“Consequently, the question for Conservative MPs, businesses and voters is likely to be this: do these tax cuts and other measures secure UK growth for the short to medium term? Or are they too little, too late and even cause more of a squeeze in the coming months and years? The answer to that question will have a bearing on more than electoral prospects. They will determine the economic and social wellbeing of the UK for the rest of this decade and next.”