Blake Morgan Chair, Kath Shimmin, comments on this afternoon’s Budget announcement.
“At the heart of today’s Autumn Budget and Spending Review was a plan to drive economic recovery and rebuild our country, post-pandemic – based on investment rather than stringent saving.
“While recognising the challenging months we have ahead, the Chancellor was upbeat and optimistic about the UK’s economic growth. He was mindful of the need to boost confidence in the future and provide more details on levelling up. Central to his approach was a focus on business and communities.
“The Chancellor recognised that the last 18 months have been incredibly challenging for businesses and recovery will be a key driver for some years to come. With this in mind, the business rates concessions announced are likely to come as a huge relief for many businesses.
“The support offered to business to adopt green technologies on their properties, in response to the green agenda was one of the few nods to tackling the climate emergency, which was otherwise notably absent among the various initiatives to continue to assist some of our more carbon intensive businesses.”
Sustainability is an area we’re supporting clients on, especially advising on how they can fund sustainable projects while remaining commercially viable, so any additional funding in this area will be welcomed by business leaders.
“The Chancellor is absolutely right to focus on upskilling the workforce as a drive to support business growth, particularly the increased investment of 42 per cent to £3.8 billion to create a new ‘skills revolution’ and bridge the skills gap. However, it will be important to make sure that his investment is directed towards the areas where businesses, for example those in south Wales, the south east and Thames Valley, have indicated the most pressing need, such as IT and STEM subjects, to support the many tech-based companies in these areas. Critically, this support needs be carried through from education to business, via appropriate post-18 programmes. The additional funding for core science promised from 2024 will also be a help in this regard.
“Levelling Up, the cornerstone of the Government’s election campaign, has become all the more important given the impact of the pandemic on regional inequalities – and today’s speech sung to that. Investment will be directed at improving transport infrastructure, small businesses and entrepreneurs outside of London. Communities will be supported through local infrastructure funding, while more new affordable homes will be delivered across the country – but how will this all be allocated across the regions? What’s important moving forward is that the Levelling Up agenda does not become skewed by the ‘north-south divide’ and that the areas not singled out for funding are not ignored. For example, it was great to see that important regional airports like Southampton will benefit from a new lower rate of Air Passenger Duty, and there will be funding for a trade and investment hub in Cardiff, so examples like this need to continue.
“We already knew about the Health & Social Care levy, so it was welcome news to hear confirmation of this. Continued investment in health and social care is vitally important, and this move to direct a tax specifically to the sector is forward thinking. It may also help soften the blow for those taxpayers who will bear the cost of the initial hike in National Insurance before this is replaced by the Levy. But who will actually pay? With inflation possibly running to four per cent at the end of the year, is this part of a trend towards a more inflationary approach to our finances, likely to flow through into bigger pay demands on businesses, some of whom will also be facing the costs of the increase in the minimum wage to £9.50/h. In my view, “Levelling Up” should include addressing the ever widening chasm between the wealthy and the poor, so I wholeheartedly endorse this increase, albeit that it may offer little comfort to those dealing with the changes in Universal Credit that go alongside it.
“Today’s speech was encouraging and provides the foundations and a framework for recovery. What we now need to see is the commitments delivered upon, while protecting public finances and ensuring the plans do not destabilise what will be a slow recovery from a challenging period.”
Blake Morgan Chair, Kath Shimmin.