Give businesses confidence to grow: North West business leaders share their Budget wishlists

North West business leaders have shared their hopes for the Budget as the Chancellor prepares to make his keynote speech to the House of Commons today.

Jeremy Hunt is today set to promise that “lower tax means higher growth” - and is widely predicted to be planning a 2p cut in national insurance. The Chancellor has been under pressure from Conservative backbenchers to cut taxes as the party lags in the polls ahead of an upcoming general election.

Budget 2024: Live updates as Jeremy Hunt expected to cut national insurance and prepare for general election

Mr Hunt yesterday attended a pre-Budget audience with the King at Buckingham Palace on Tuesday as speculation grew over what would be in his keynote speech.

North West business leaders have been sharing their hopes for the Budget with BusinessLive as they call for measures to help the region's businesses to survive, invest and grow.

Chancellor ‘will want to offer pre-election giveaways’

Subrahmaniam Krishnan-Harihara, deputy director of research at Greater Manchester Chamber of Commerce, said: “If media reports are to be believed, the Budget is going to be the second episode of a tax cutting story with the Chancellor expected to reduce personal taxation either through a cut in the basic income tax rate or a further reduction in NI. There are also reports that the cut in fuel duty first introduced in 2022 will be extended by another year.

“The Chancellor is expected to take full advantage of fiscal 'headroom' to fund these measures. However, fiscal headroom is not set in stone and will change as economic conditions change.

“One issue that has not found much mention is investment, both public and private. If tax cuts are funded by lowering future public spending plans, it is not necessarily a positive. Private business investment follows public investment and there isn't enough of either at the moment in the ��Ƶ.

“There is no doubt that the Chancellor will want to offer pre-election giveaways in tomorrow's Budget. In so doing, one hopes that the Chancellor will strike a balance between tax cuts and the need for long-term economic growth.”

Chancellor ‘must make SMEs feel confident’

Paul Cherpeau, chief executive of Liverpool Chamber, says the Budget should be a chance to make businesses feel confident about investing.

He said: “While the Chancellor may be focussed on the political ramifications of his fiscal policies amid an impending General Election campaign, what really matters to businesses is the creation of an environment of relative stability and consistency to enable them to grow and thrive. Growth is stubbornly stagnant and that will only change when businesses feel confident enough to invest in new plant, premises or people.

“We urge the government to look beyond the near horizon of the Budget and use it as a staging post to make changes that reduce the various long-term barriers to growth for SMEs.

“Headline cuts to Corporation Tax seem unlikely, but a number of more technical changes are within his gift, such as increasing VAT thresholds or strengthening R&D tax reliefs, and a serious package of overall measures to encourage growth would have genuine benefit for entrepreneurs and business owners without destabilising the wider economy.

“Greater financial incentives, such as a mooted ‘super-deduction’, to help businesses support staff wellbeing and get people back into work, would also be a welcome shot in the arm to boost productivity.

“If Jeremy Hunt is serious about long-term economic growth in the Liverpool City Region and elsewhere, then the Budget and the months that follow it are his chance to prove just that."

What would city centre businesses like to see?

Bill Addy, CEO of Liverpool BID Company, says there are five things that businesses in Liverpool city centre would like to see from the Budget - VAT relief, an extension to business rates relief, tax-free shopping for international visitors, support for cultural venues, and support for businesses.

He said: “Business confidence is a real issue and the challenges being faced by retail and hospitality venues is acute. The industries are vulnerable to the economic headwinds coming their way, and 2024 could be a challenging year. We cannot burden these businesses with more debt and costs. Instead we should reduce VAT, showing confidence and support for our high streets and city centres.

“The business rates system is broken and needs wholesale reform. If the Chancellor does not take action to reduce this burden, we risk seeing more closures on the high street and in our city centres. Anchor tenants, who provide confidence, jobs and vitality to areas are risking closure. Abolish the planned business rates increase in April and give the sector room to breathe.”

Liverpool BID Company is backing the Association of International Retail’s campaign to bring back tax-free shopping for international visitors in a bid to boost spending in shops. The BID Company says total international spend in Q3 of 2023 in Liverpool was down 10.5% compared to Q3 of 2022.

Mr Addy said: “The re-introduction of tax-free shopping would provide a much needed boost to our city centre economy, translating to valuable jobs, and economic self-sufficiency. It would increase footfall in key destinations within the city centre, boosting the city’s visitor economy and tourism spend.”

He added: “The cultural sector is under extreme pressure as funding is reduced or stagnates. The Museums and Galleries Exhibition Tax Relief has been extended to March 2026, but we need the government to go further. Extending the tax relief on retail and hospitality would support the music sector but we need the government to go further - explore long term funding support for venues and reduce VAT on tickets; make it easier and more affordable to have a vibrant cultural sector that creates jobs and enhances our city.”

‘We need to support businesses to encourage workers back to offices’

On business support, Mr Addy said: “Since the pandemic, we have seen the way we work change. We need extensive support for businesses to help encourage workers back to offices. This (fewer people in offices) is having a knock on effect on footfall and activity in our city centres.”

Mr Addy said support could include encouraging older people back into the workforce. He said: “The ��Ƶ is struggling to welcome those over 55 to the workplace. Targeted support would help to make work more accessible and inclusive.

“Affordable and reliable public transport make it easier for commuters to feel more confident that their way into work will be on time and will not be too expensive.

“Energy support for organisations will help them to pay for utilities and keep offices open.”

Hospitality firms call for action

More than 100 bosses from the hospitality industry signed a letter to the Chancellor demanding immediate action in the Budget to stop more businesses from failing.

The letter from ��Ƶ Hospitality called for the Chancellor to:

Put a cap on business rates increases from April 2024 at 3%:
Introduce a temporary cut in the lower rate of Employer National Insurance Contributions to 10%:
Review the benefits of a reduced rate of VAT for the sector to 12.5%

Signatories included Greater Manchester-based group Revolution Bars and Chorley-based Halewood Artisanal Spirits.

��ƵHospitality chief executive Kate Nicholls said: “The sector’s message to the Chancellor is loud and clear: without further economic support at the upcoming Budget, we risk losing more of our institutions and doing irreversible damage to our world-leading hospitality sector.

“Extortionate operating costs are making it incredibly challenging to run a profitable business, so it’s vitally important that this is addressed in order to ease ongoing cost pressures and protect businesses from the threat of closure.

Kate Nicholls is CEO of ��ƵHospitality

“This sector is one of the ��Ƶ’s leading employers, providing work to more than 3 million people, and contributing more than £93bn to the economy each year. It not only deserves the support we are collectively asking for, but it needs it.

“I sincerely hope that this letter, supported by leading individuals from across hospitality, will be enough to convince the Chancellor that his actions on 6th March will be make or break for many venues up and down the country.”

Debt advice organisation wants support for the most vulnerable

Chris Davis, group CEO of Manchester-based MoneyPlus, said Government support should be targeted at those who are most vulnerable and facing problem debts. That could include incentives for lenders to partner with debt advice providers.

He said: "We’re seeing energy prices fall but there are large swathes of people who, whilst appreciative of the reduction in costs, are still facing daily challenges to simply make ends meet. Some of those with unfixed mortgage rates and short-term tenancy agreements have seen their monthly payments more than double, leaving them in extreme financial difficulty. Rather than there be a blanket level of support - as has been the case - we now need to have a simple targeted approach that supports those that need the greatest support.

“While anticipated tax cuts may offer some further relief, there are high profile challenges posed by available public finances and inevitably savings gained in one area will lead to increases elsewhere. However, we firmly believe that addressing the broader cost-of-living challenges facing so many households, remains essential.

“Childcare costs are increasing for parents across the country, and we know a high proportion of our own customers are in receipt of child benefit payments – accounting for almost half of our customers who are currently repaying debts via an IVA (Individual Voluntary Arrangement). This is why we are in support of the rumoured proposals to raise the £50,000 threshold for child benefit eligibility. This would bring some crucial relief to households that have been unfairly penalised because their incomes have surpassed the threshold due to inflation.

“Looking at the broader picture, now is the time for the Chancellor to underline the availability of debt advice, so that the sooner consumers need advice, the sooner they get it. In every walk of life, the earlier the intervention the better. Consumers need to know that help is available and this help is available from both the charitable sector and the fee charging sector - the latter of which applies to every consumer who ends up needing IVA advice - in such circumstances all consumers are charged fees, but the patchwork of regulation means that misconduct and disinformation is enabling some bad actors in the commercial sector to take advantage of those who are vulnerable.

“Additionally, lenders have an incredibly important part to play. Their role and importance in terms of debt support is growing and we’d like to see more encouragement and incentives from the Government to ensure lenders are working for their customers best interests. This means lenders partnering with debt advice providers at the earliest opportunity to produce the best possible results. Debt advice can and should be given by those firms who are regulatory permitted to do so; irrespective of whether they charge a fee or not.”

“Finally, it should go without saying but mental health remains a critical factor in financial well-being, and any budgetary decisions must prioritise holistic support for individuals and families. We hope to see the Chancellor prioritise ongoing support for low-income families and individuals, ensuring that vital assistance remains accessible to those who need it most.”