North-west reacts to 2023 Spring Budget

Business leaders from across the North-west and the rest of the UK have shared their reactions to yesterday’s Spring Budget from Chancellor Jeremy Hunt.

In his first Budget as Chancellor, Jeremy Hunt set out his plans to grow the economy against a backdrop of stagnant growth and high inflation. A summary of key announcements can be found here.

An renewed emphasis on Levelling Up and local devolution was among the big ticket announcements of the Chancellor’s Spring Budget. Additional powers of spending for Greater Manchester were warmly received by political leaders in the city-region.

Greater Manchester Mayor Andy Burnham said:

“With more power comes the need for great accountability and I welcome the strengthened arrangements announced in the Deal.

“While we didn’t get everything we wanted from the Deal, we will continue to engage with government on those areas in the future. For now, our focus will be on getting ready to take on the new powers and be held to account on the decisions we will be making on behalf of the people of Greater Manchester. Today is a new era for English devolution.”

Leader of Stockport Council, Cllr Mark Hunter, echoed the sentiment, saying:

“Decisions that will make a difference to the lives of local people can now be made locally, which is welcome news and gives Greater Manchester more control of what happens in our region, including Stockport. Giving local leaders the power and influence to make important decisions like this in areas they know best, will ensure local people are at the heart of this agenda.”    

The business community has also warmly received announced tax breaks on capital investment for businesses, and newly announced Investment Zones. Matthew Fell, CBI Interim Director-General, described the Budget as a “strong second act” following November’s Autumn Statement. He commented:

“The CBI called for action on people and productivity and the government has delivered support for both. Measures to help households and businesses will secure the growth we need to boost living standards for all.

“Full capital expensing will keep the UK at the top table for attracting investment and puts us on an essential path to a more productive economy.

“Boosting childcare provision is a big win for businesses struggling to recruit and retain, and parents balancing care and career needs.

“Alongside support for occupational health to help people stay in work, it shows the Chancellor is listening to business on reducing economic inactivity and easing a tight labour market.

“New investment zones focused on economic clusters will drive growth across the country and increased support for quantum is a further step towards making the UK the science and technology superpower it aspires to be.”

On a local level in Greater Manchester however, support has been more mixed. Subrahmaniam Krishnan-Harihara, Head of Research at Greater Manchester Chamber of Commerce welcomed many of the measures announced by the Chancellor but questioned how effective measures would be, in particular on childcare and pensions.

“Amongst today’s announcements, the one that could have the most impact on economic inactivity and workforce participation is help with childcare. Families with children aged one and two who do not currently receive any childcare support will now receive up to 30 hours per week of childcare. Along with additional funding for nurseries for the existing free childcare offer and for schools and local authorities to increase the supply of wraparound care, these measures present a definite opportunity to increase female participation in the workplace. However, it appears that the new childcare support for children under the age of three will be limited to 38 weeks of the year meaning there are still some gaps in this.

“In another “back to work” measure that is largely targeted at doctors, senior civil servants and other very high earners, the annual tax-free pension allowance has been increased to £60,000 while, to the surprise of all, the lifetime allowance has been abolished. Although it could encourage some senior NHS consultants to postpone retirement, it is debatable whether this measure will have much impact on decreasing the economic inactivity rate across the board or on encouraging more people to come out of retirement.”

While welcoming the support for the hospitality sector on the Draught Relief for alcohol duty, Greater Manchester’s Night Time Economy Advisor Sacha Lord also saw gaps in the support for businesses. He warned in a social media post:

“[It is] Very disappointing that there is no mention of further support for business energy bills or any sector specific package for hospitality. As support tapers off for business from the end of March, it will create a sinkhole of financial difficulty for operators.”