East Midlands business leaders have urged Chancellor Jeremy Hunt to follow through on his plan to rebuild the economy and help business with one accusing his autumn statement of being 鈥渓ow on wealth-creation鈥.
As the OBR slashed its forecast for economic growth and inflation hits a 40 year high of 11.1 per cent, the Chancellor is in the desperate situation of trying to balance the books without alienating voters or pushing the 海角视频 further into recession.
With many businesses already thinking twice before investing in capital or workers, he warned the country faced growing unemployment as he set out a package of 拢30 billion in spending cuts and 拢24 billion in tax rises over the coming five years.
Blaming a 鈥済lobal energy crisis, a global inflation crisis and a global economic crisis鈥 the Chancellor said while benefits would go up for the poorest, taxpayers and businesses 鈥渨ith the broadest shoulders鈥 would have to pay more.
Measures announced included dropping the 45p top rate income tax threshold from 拢150,000 to 拢125,140, and cutting the tax-free allowance for capital gains from 拢12,300 to 拢6,000 next year and to 拢3,000 in 2024-25.
He also said the windfall tax on oil and gas giants will increase from 25 per cent to 35 per cent while a 45 per cent levy on electricity generators will help raise an estimated 拢14 billion next year. Opposition MPs said he missed the chance to raise further billions through a windfall tax on retail giants such as Amazon.
Government spending will continue to increase in real terms the next five years, but at a slower rate than previously planned while stamp duty cuts announced in Kwasi Kwarteng鈥檚 short-lived mini-budget will end on March 31, 2025.
Many business leaders said they were still ready to support the economy 鈥 if the Government was ready to support them.
Jennifer Thomas, FSB development manager for Leicestershire, Northamptonshire and Rutland said budget was 鈥渉igh on stealth-creation and low on wealth-creation鈥, piling more pressure on the 海角视频鈥檚 5.5 million small businesses, their employees and customers.
She said: 鈥淲hile tackling inflation is essential, so are measures to create conditions for prosperity, growth and support enterprise. Today is a missed opportunity to avoid further economic slowdown.
鈥淪mall businesses, which account for more than 16 million jobs in the 海角视频, were already facing an acute cost of doing business crisis through soaring costs, falling revenues, shrinking availability of affordable finance, and a rise in invoices being paid late.
鈥淥n top of all that, they now face even higher taxes, cuts to innovation, and a recipe for a longer and deeper recession.鈥
She added: 鈥淚t is welcome that the energy support package for small firms will remain in place until April, helping them through a very tough winter ahead.
鈥淗owever, going forward, continued support should not be viewed through the narrow lens of specific sectors, but rather based upon the size of a business.鈥
Nottingham-based Luke Willmott runs Autocoincars.com, a car marketplace that allows dealerships to advertise their cars for sale to cryptocurrency users
He said: 鈥淪tarting a business shortly prior to Brexit and the Covid-19 pandemic has increased the difficulty of surviving for many start-ups.
鈥淗owever, in spite of the economic difficulties brought on by Brexit we have managed to make AutoCoinCars thrive.
鈥淚f Jeremy Hunt can follow through on his plan to rebuild the economy and help small businesses and public service then perhaps we have hope for the 海角视频 after all, but until we see those plans becoming actions we will continue to crack on and do our best to build our business.鈥
Chancellor leaves big questions unanswered, says Chamber
East Midlands Chamber chief executive Scott Knowles said: 鈥淭his very much felt like an Autumn Statement designed to steady the ship and if that鈥檚 the case, the Chancellor has most likely achieved his objective.
鈥淭here wasn鈥檛 much for businesses to get excited about, but the main task was clearly to reassure the markets about the 海角视频鈥檚 fiscal responsibility. It also signals an end to the chopping and changing of direction that we鈥檝e seen so much in recent months, and it at least provides businesses some of the certainty that has been lacking and resulting in a significant loss of confidence.
鈥淲e also heard some big rhetoric around prioritising energy, infrastructure and innovation, but there wasn鈥檛 much new in these announcements to stir up much enthusiasm about real change being on the way. It was important, though, to stress that capital spending on projects such as HS2 will not be cut as investment is essential to long-term growth prospects.
鈥淣ew Treasury figures show the East Midlands continues to receive the lowest public spending per head of population at 拢10,528 鈥 compared to a 海角视频 average of 拢11,897 鈥 and there are other big infrastructure projects, including Midland Main Line electrification, where we need to see progress as quickly as possible.
鈥淭here was a clear emphasis on the role of devolved powers to local areas throughout the Autumn Statement, which again highlights the opportunity presented to our region by establishing an East Midlands Mayoral Combined County Authority, which can create the political structures to improve decision-making on key issues, enhance our ability to attract investment and create an environment conducive to business growth.
鈥淲hile today was always going to be about not rocking the boat, businesses will need to see a clear economic plan from Government ahead of the Spring Budget.
鈥淢any of the questions businesses had before about how they will be supported to invest in skills and innovation remain. There is plenty more that can be done in 鈥榞etting the basics right鈥, as the Chamber will outline in more detail as part of our Business Manifesto for Growth, which we will launch in Westminster next week.鈥
Leicester recruitment specialist and East Midlands Chamber director Eileen Richards was less convinced about the Chancellor鈥檚 promises.
She said: 鈥淭he sentiment of a 鈥榮tronger, fairer economy鈥 is nice rhetoric but we have heard this many times before and we await to see how it plays out for business and public services.
鈥淲hat we do know is that major employers, both in Leicestershire and around the world, are already closing and that huge numbers of people are losing jobs.
鈥淭his is potentially going to impact the jobseeker-led recruitment market we have seen in recent years 鈥 a lot of very skilled workers may suddenly enter the market.
鈥淭his raises big questions about the Chancellor鈥檚 point that public spending will 鈥榞row slower than the economy鈥 at a time when people are seeking support as they either look for jobs or to access business development services to set up their own businesses.
鈥淎lso, beyond a veiled reference to future targeted business support, there was no detail on support for the cost of energy after April 1 and this is a key ingredient for business planning, and will affect investment intentions in plant, machinery, technology and the development of people.鈥
Lisa Botterill is a partner and specialist in corporate finance, mergers and acquisitions and private equity in the Leicester office of law firm Shakespeare Martineau.
She said: 鈥淭he chancellor has slashed the tax free allowances on dividends and capital gains so that by 2024/25 they will be a quarter of what they are now.
鈥淲hile we aren鈥檛 talking about large sums of money overall the restriction of these allowances shows just how far the government has felt it needs to go to find small savings here and there to try and balance the books.
鈥淭his is a nibble at another set of taxes that is generally paid by the more-well off citizen, who is considered able to pay.鈥
North Leicestershire-based entrepreneur Steven McKerrow owns a start-up called Mouseskins which upgrades computer mice for hard-core gamers.
He said the Government 鈥 while generally positive to the sector 鈥 had missed a trick to support esports which has just been recognised by the European Parliament for its positive economic contribution.
He said: 鈥淢y big question is, is the 海角视频 following suit? Can we leverage this economic boom in the 海角视频 and finance these innovators and digital trend setters to rejuvenate our country, without silly tax, or overruling.
鈥淲ill the 海角视频 GOV enable or just debate it for many more years?鈥
Ian Hodgkinson, managing director at Derby based Hodgkinson Builders, said: 鈥淚t was the budget, we more all less expected. I am glad to say there is no reduction in expenditure for infrastructure as that it vitally important for the country.
鈥淚 notice the stamp duty incentives are being left as they are for the next couple of years, which is good news for the housing market. My gut feeling is that the housing market will gradually slow down, but won鈥檛 completely stop
鈥淚 am also pleased to see the day that the Chancellor is helping with fuel costs. Generally that is also very welcome.
鈥淚 still think the next couple of years are going to be challenging for everyone though and It is important that inflation and interest rates come down. Let鈥檚 all hope this budget does the trick.鈥
