AUTUMN BUDGET 2021: National business reaction

October 27, 2021

Business groups have welcomed a number of measures in yesterday’s Budget but said Chancellor Rishi Sunak could have done more to encourage investment.

The CBI, which speaks on behalf of 190,000 businesses of all sizes and sectors, described it overall as business friendly, with its director-general Tony Danker saying the Chancellor had shown a “genuine willingness to listen to business with measures that will get firms innovating and help the economy to grow”. 

However, while it took several positive steps forward, it wasn’t bold enough to deliver the high investment, high productivity economy the government seeks, he added.

“On business rates, the Chancellor made real strides in making the system more palatable for businesses in the shorter term.

“More frequent valuations, wider reliefs and improving the incentives for firms to decarbonise their premises is what firms have been calling for.

“But the hard truth is that wholesale reform to unlock investment was rejected today. The government missed the opportunity to truly reform a business rates system that diminishes Britain’s high streets and factories.”

He added that the government’s commitment to innovation would be a central cog to the UK’s prospects to leading in the industries of the future.

“This will be essential to be globally competitive so the Government must stick to these targets in the coming years.

“Meanwhile, businesses will welcome the new skills bootcamps. This agile approach must now be the watchword when it comes to revolutionising the skills landscape, including for apprenticeships.”

He said the Budget alone would not seize the moment and transform the UK economy for a post-Brexit, post-Covid world. 

“Businesses remain in a high-tax, low-productivity economy with concerns about inflation. But the Budget will have a positive impact across the economy and makes several changes that will be welcomed by UK businesses.”

British Chambers of Commerce (BCC) director general Shevaun Haviland, pictured, said the Chancellor had listened to its long-standing calls for changes to the business rates system, so the reforms announced in the Budget would be good news for many firms.

“It will provide much-needed relief for businesses across the country, giving many firms renewed confidence to invest and grow,” she said.

“Additional investment in skills, infrastructure and better access to finance will be key drivers for our economic recovery and will provide longer-term benefits and opportunities for businesses across the country.”

Businesses had been battered by 18 months of the pandemic and problems around supply chain costs and disruption, labour shortages, price rises, soaring energy bills and taxes, and there may still be difficult months ahead, added Ms Haviland

“If firms face unexpected bumps in the road, the Chancellor must  be prepared to  take  further action  to enable the economy to fire on all cylinders again.”

The Forum of Private Business, which mainly represents small firms, claimed the Chancellor had “once again” failed to address the issue of business rates properly and missed the opportunity to create an immediate level playing field across small businesses, big businesses and online businesses.

And while support for extended reliefs for the hospitality sector was welcome, but other small businesses have been ignored, it said.

Forum of Private Business managing director Ian Cass added that, while supporting the focus on low pay, the pain would be faced disproportionately by smaller businesses from the rise in the minimum wage and may drive some businesses to delay new job creation.

“The relief provided to businesses during the pandemic by postponing business rates saved many businesses from closing,” he said.

“To save our high streets, those same businesses need that relief to continue. The 50% allowance for hospitality sector businesses is clearly welcomed – and providing reliefs for green investment is fine – but many of the shops that our communities rely on still face what they see as unfair business rates, and deferring the reviews until 2023 risks kicking the can down empty high streets.”

The FPB emphasised the impact on high street businesses of online business growth during the pandemic. The imposition of business rates on shops and offices, but less so on online businesses, meant that there was an imbalance on fair competition which threatened the life of the country’s high streets.

“The use of online services accelerated during the pandemic, quite understandably, and it is a shame that the Chancellor has not similarly accelerated a fair business rates regime across all levels of business,” added Mr Cass.

TUC general secretary Frances O’Grady, pictured, said the Chancellor had gone from pay freeze to pay squeeze.

“Millions of key workers who saw us through the pandemic will still be worse off than they were in 2010," she added.

“That puts vital services under pressure as even more staff leave, and it risks the recovery. He should have announced fair pay deals for whole industries, negotiated with unions, designed to get pay and productivity rising in every sector.” 

The Budget had delivered some measures that should help to arrest the current decline in small business confidence, said Mike Cherry, pictured, chair of the FSB (Federation of Small Businesses).

“But, against a backdrop of spiralling costs, supply chain disruption and labour shortages, is there enough here to deliver the government’s vision for a low-tax, high-productivity economy?

“Unfortunately not. Where inflation and forthcoming tax hikes are concerned, the clouds are gathering.

“Much more will be needed to support small employers in the months ahead. Our call for an increase in the Employment Allowance to £5,000 would have made a real difference to efforts to increase wages, retain staff and create jobs as we head into the critical festive season.”


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