Responding to the Chancellor’s Autumn Statement Chris Fletcher, Policy Director at Greater Manchester Chamber, said:
“It was clear coming into this that there was very little room for manoeuvre by the government set against a worsening economic background. But Mr Hunt was clear that the statement did lay out tax rises and spending cuts equalling around £54bn designed in his words to provide stability, increase growth and protect public services.
“The content contained a huge amount of announcements reflecting that every area of government spend was under review and apart from a few, big headline announcements it is clear that the savings and tax increases are spread across a raft of policies with many being kicked down the path to be dealt with by the next government.
“From a business perspective it was good to hear confirmation about infrastructure spend being kept at previous levels although increases are not on the long-term agenda. This will allow vital infrastructure projects like HS2 to Manchester to proceed and the trimmed down version of Northern Powerhouse Rail to at least still be on the books.
“The growth priorities of energy, infrastructure and innovation all make sense and whilst it could have been easy to cut these by maintaining current spending plans the government has shown it recognises the fact that on-going investment in infrastructure and growth measures pay benefits over the longer term.
“There were a number of measures announced that warrant close monitoring such as the Employers National Insurance Contributions freeze and the Employment Allowance staying at the current level – current challenges in the labour market are quite complex, so these may not be a big disincentive, with a recession coming, this picture could change dramatically.
“The Chancellor also confirmed that the revaluation of business rates will go ahead in April 2023. Although transitional relief may be available to some businesses, there will be nervousness about possible increases in rates that businesses will have to pay. Any increase will particularly hit hospitality and retail at a time when reduction in consumer spending and inflation are already hitting these sectors.
“As ever more details will emerge over time including at least three separate reviews announced into a variety of policy areas. With such a complex, involved series of actions over a wide-ranging number of areas and a constantly changing economic background it may mean some unforeseen surprises good and bad over the coming 12 months or so. All eyes will no doubt be on next year’s Spring Budget and the reaction from the markets and overseas investors in the hope that the results from the previous Chancellor’s mini-budget are not repeated.”
Angela Cross, partner and Head of Tax in the North West at BDO, said:
“The Chancellor set out his stall to prioritise stability, growth, and public services through tax rises and spending cuts.
“Given the instability of the past few years, businesses were calling for certainty and a longer-term tax roadmap, so many will welcome some of the announcements signposting planned changes and freezes up to 2028.
“As well as the headline issues around inflation and rising costs, businesses are deeply concerned about supply chain disruption, energy shortages and rising energy costs this winter.
“Our recent Rethinking the Economy research found more than half feel there hasn’t been enough investment in levelling up. The Chancellor announced an update on the proposed Investment Zones that they will be focused around R&D in universities in “left behind” areas. The key will be connecting businesses in the North West with the talent and ideas in these clusters to ensure the investment will effectively drive levelling up.”
Katie Gallagher, chair of the UK Tech Cluster Group and MD of Manchester Digital, said: “Despite the impending recession, the tech industry across the UK regions remains strong and vibrant. While it’s encouraging to see the mission to become the global Silicon Valley and increased funding to R&D, we desperately wanted to hear more commitments to help both the tech talent pathways to ease the ongoing skills crisis, as well as firm commitments to help early-stage start-ups which are imperative to growing our tech economy.
“We are eager to hear clarification on which part of the previous Northern Powerhouse and HS2 rail commitments will go ahead, as they will help our NW tech businesses recruit and do business.
“We welcome increased funding for devolution, however, the regions need even more freedom to make decisions for their own individual areas, in order to drive innovation and growth that the UK so sorely needs.
“A change to how the Apprenticeship Levy works would have helped businesses unlock more funding to upskill existing staff and bring in new talent pipelines. There should be a huge focus on upskilling the UK workforce, as well as developing our talent pathways right from school age.
“Overall our tech and digital industry across the whole of the UK is strong and innovative, but is being held back by lack of joined-up-thinking around funding in people and skills, as well as ongoing Brexit fallout.”
