Autumn Statement 2022: Bath business reaction

November 17, 2022

The growth path for businesses and the UK economy may be “long, rocky, and protracted”, the region’s largest business group fears following the Autumn Statement.

Matt Griffith, pictured below, director of policy at Business West – the organisation that runs Bristol Chamber of Commerce – described the statement as “a difficult budget for difficult times”. 

He added: “Although there was less immediate pain than expected, the Chancellor set out rising taxes and pressure on public spending in the medium term, often by freezing many thresholds below record inflation, meaning the growth path for businesses and the UK may be long, rocky, and protracted.

“The statement brings us back from the brink of the sharp rises in interest rates and damage to confidence we saw from the mini-Budget. The sombre tone of both the Chancellor and the backbenches reflected this.”

There were small glimmers of light, he said, in slightly better projections for growth from the OBR (Office for Budget Responsibility) compared to the Bank of England.

This, and a change to the government’s fiscal rules, meant that the government avoided what would have been a damaging return to budget consolidation in the middle of a recession.

“However, many of the hard choices were postponed, not avoided,” he said.

“Looking specifically at taxes and spending that directly affects businesses, the research and development scheme for smaller businesses has been cut which will impact many firms in investing in new innovation at a time where stability is needed.

“Revaluation of properties for business rates will proceed next year as scheduled, with some support to prevent big jumps in bills.

“Employers’ National Insurance levels will remain unchanged, but the National Minimum and Living Wage rates are increasing by just under 10% from April 2023 based on record inflation.”

Reflecting what was in effect a new government, much of the detail of the country’s future economic and business plan was pushed back into reviews and future statements, while there were some announcements of new small forms of devolution and some saving of previously planned infrastructure spending.

Business West was also disappointed that there was almost no mention of the West of England in plans for specifically targeted boosts to local growth. 

“However, after several years of political turbulence and changing government business and economic strategies, there is now a need for a return to seriousness and stability in how government plans and delivers its economic plan,” he added.

“We cannot afford optimism of a future return to growth to be forfeited by more lost opportunities to deliver the changes and confidence business needs.” 

Ed Rimmer, pictured, CEO of Bath-headquartered Time Finance, which provides alternative forms of growth finance to small firms, said the Autumn Statement would “plant a worry seed for businesses – many of whom will take the brunt of rising taxes and reduced consumer spend”.   

While the government undoubtedly had some tough decisions to steady the economy, reducing take home pay packets would bring some understandable tightening of the consumer purse strings.

“For these steps to be effective, they must be accompanied by measures to support and stimulate consumer spend. The health of businesses, and the economy, depend on it,” he added.

The statement also lacked direct and targeted support for businesses.

“While spending cuts feel a vital move for a country in financial woe, the back pockets of businesses will certainly feel the strain, particularly as the energy price caps raise from £2,500 to £3,000, further worsening the load,” he said.

“This fiscal plan serves, with the one hand, tax increases for all, but with the other the government so desperately needs to help spark and stimulate consumer spending – either through special initiatives or properly financed support schemes.”

Simon Peacock, pictured, head of regions at national property consultancy JLL – who previously headed its South West office – said the UK’s regional cities would rightly feel nervous about the onset of ‘Austerity 2.0’ “given that the scars of the last round have barely been healed by the stop-start nature of the ‘Levelling-Up’ agenda”.

“Clearly, given the financial crisis caused by the markets’ fear that the UK had lost its sense of fiscal responsibility, there was a need to restore trust today,” he added.

“But with few initiatives to boost growth and a slower rise in capital spending, the public sector is going to find it much harder to play an active role in local regeneration projects.”

He said cuts to budgets would force government departments and local authorities to make really hard decisions that ultimately reduced the people and capacity available to deliver on growth and renewal in the region.

While investment zones may not have delivered what was suggested in the recent discredited mini-Budget, they were an idea of some promise and at least worthy of exploration, he added.

“As we look ahead, we await details for the university-focussed scheme that will replace them and hope it will come to the fore before the next Budget to support local authorities.”

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