Business leaders from across the South West have been sharing their predications and wishlists ahead of the Budget.
Chancellor Jeremy Hunt will unveil the government’s latest economic plan in the House of Commons later today.
It follows November's autumn statement, when Mr Hunt outlined a package of “difficult decisions” amounting to a “substantial tax increase”, in order to put the UK on a “path to stability”.
That was in stark contrast to predecessor Kwasi Kwarteng’s widely-criticised, tax-cutting ‘mini- Budget’, which was followed by market turbulence and a drop in the value of the pound just two months beforehand.
Ahead of Mr Hunt’s speech to MPs later today, which you can get live updates on through a live blog on BusinessLive's home page, here is a round-up of what some in the South West business community think, or would like to see, included.
BANK
The Bristol-based restaurant’s founder Daniel O'Regan said: “Like so many industries, hospitality has seen a significant downturn since the pandemic and the subsequent cost of living crisis. As a business, we have been squeezed on both sides by the rise in the cost of food and the drop-off in demand.
“One of the only clear paths to immediately address the crisis in the hospitality sector is a reduction in VAT. The majority of European countries have recognised how challenging it can be for the hospitality sector, and have implemented reduced rates for hotels and restaurants, by over 80% in some cases.
“The UK is lagging in its support for the hospitality industry. Great hospitality is a vital part of our way of life, and the rate of business closures is seriously affecting that.”
Bevan Brittan
David Hobbs, the newly appointed head of national law firm Bevan Brittan’s Bristol office said: “I expect we will hear more about levelling-up in the Spring Budget, but it is vital that Bristol and the South West does not miss out on this. Although it looks like the recession will be shorter and not as deep as predicted, we need a coherent policy from the government that puts the economy back on the path to growth.
“There has quite rightly been a focus on the cost of living, but we can’t forget that the cost of doing business has also gone up dramatically. A reduction in business rates would be very welcome to help ease the pressure on businesses. The environment and sustainability is of vital importance, and is something we take very seriously at Bevan Brittan, so I’d also welcome more clarity on how the government is going to deliver its net zero targets.”
Business West
Ian Mean, Gloucestershire director at Bristol-based chamber of Commerce Business West, said firms across the region would be "waiting with bated breath” on the Chancellor’s decisions.
“My wish list for business is very simple. I would like to see a co-ordinated industrial strategy that sets out clearly the government’s support for business- especially those SMEs, the small companies that contribute the lion‘s share to the Gloucestershire economy.
“I am not an economist but it is obvious we need to help our companies grow. But that growth will only come with support whether it is Rolls-Royce or an innovative micro company here in the county that has a potential world- beating product.”
Mr Mean called for the government to support Rolls-Royce’s small modular reactors programme, with the firm considering basing two of these ‘mini’ nuclear plants in Gloucestershire, adding the UK could face losing out on “a vital source of energy” if it didn’t.
“Business would, of course, like to see the Chancellor not raise corporation tax from 19% to 25% as anticipated. But I cannot see this happening in the light of inflation and our national debt pile.
“However, firms are less likely to invest to grow if they are faced with paying more tax. That’s why the Budget simply must give companies a chance to grow with some support packages that really give our SMEs the chance of seeing light at what has been a very dark tunnel for many of them.
“The Chancellor could start by giving support to reduce childcare costs to allow more women to work. There are enough jobs around in Gloucestershire—over 20, 000 vacancies at the last count.”
Don't Buy Her Flowers
Steph Douglas, the founder of Gloucestershire-based online gifts business, said the company had been impacted by the cost of living crisis and the “debacle” of the Truss government’s ‘mini-Budget’, with traffic on its website down “around 40%” for much of last year.
Ms Douglas said: “We’ve seen an increase in traffic in Feb ’23 for the first time in a year (bar Christmas) with sales up 15% in Feb from Jan month on month but have learned not to get any hopes up. We’ve seen many small businesses around us have to close in recent weeks.
“Brexit and the red tape involved in shipping abroad continues to make it impossible. We’ve also found ourselves on the receiving end of HMRC R&D spot checks, we know we are fine with this but the time taken in admin for the team has been a killer when we are already struggling in the current climate.
“Sometimes It’s like they want to make it harder for us. A budget that buoys consumer confidence could make a big difference. One that doesn’t, would be a disaster for small businesses.”
Dorset Chamber
Chief executive Ian Girling said the Chancellor was facing “a difficult balancing act” between fiscal responsibility and delivering “a business friendly budget”.
Mr Girling said: “Changes to pension allowances and childcare costs to encourage more people back to the workplace will be welcome to help ease tightness in the labour market and recruitment problems faced by many businesses.
“Some of these returning employees may bring important skills. However, others may not or may require some retraining. It is important that business receives support to realise the full potential of this returning workforce.
He added that a rise in corporation tax would “do little to inspire confidence that the government prioritises business”.
“Changes to investment allowances, so more expenditure can be offset against tax, would be welcome to help redress the balance.
“More support for exporters would be also welcome, including measures for more streamlined processes to reduce the administrative burden which can act as a barrier to international trade.
“Our plea to the Chancellor is not to forget business, which is the dynamo which drives the economic growth necessary for the UK to thrive.”
Lloyds Bank
Amanda Dorel, regional director for the South West at Lloyds Bank, said: "Business confidence in the South West has dipped to the lowest of all UK regions in recent months. So, ahead of the Budget, firms will be looking to the Chancellor to support long-term, sustainable growth and encourage higher levels of productivity.
“Growing the economy is key and the Budget is an opportunity to bring further stability and encourage investment in future growth. The Chancellor could show that he can help meet these ambitions by increasing capital allowances and providing the greater certainty and support businesses need to invest in a more high-tech, low-carbon economy.”
Somerset Chamber of Commerce
Emma Rawlings, chief executive of Somerset Chamber of Commerce, said: “Business confidence continues to fall so it is imperative the Chancellor takes action to encourage firms to invest in new projects to boost the UK economy.
“But without any clear message from government about future policies and with costs continuing to increase across the board, businesses are reluctant to use any of their dwindling cash reserves on investment.
“In addition, the Chancellor must help ease the ongoing recruitment pressures by reviewing the Shortage Occupation List which allows firms to recruit abroad and make it easier for working parents to access affordable childcare.
“Action must also be taken to support start-ups by reforming the business rates system and more support needs to be given to help businesses become greener and more energy efficient, which in turn will help them to reduce expenditure.”
Time Finance
Ed Rimmer, chief executive at the Bath-based alternative finance specialist firm, said: "Although this will effectively be a ‘mini budget’, there should be nothing small about it.
“What SMEs need to see from the Chancellor is a strong agenda which supports in a two pronged approach: increased optimism through financial investment and a dedication to skills development and employment.
“Businesses have struggled with employment for some time now and what they really need are measures to stimulate the job market whilst systems are put in place to support people into work.
“With the planned rise in corporation tax, from 19% to 25%, I would like to see some tangible benefit being funnelled back to businesses to give them the financial stability to breed confidence and optimism. Businesses that feel secure are businesses that are more likely to take risks, and as the Chancellor said in January, it is the risk takers who succeed, grow and prosper.”
Read next:
- ‘Positive picture’ for South West firms as confidence hits one-year high
- PwC finds South West now second best place in the UK for women in the workplace
- Gloucestershire businesses - have your say on what you need to thrive
- Pub group boss slams government and suppliers on energy ‘scandal’
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