Business leaders across the North-west have had a mixed response to the Chancellor’s 2021 Autumn Budget, announced on 27th October.
Chancellor Rishi Sunak set out the government’s latest spending plans on 27th October, announcing a raft of measures aimed at supporting the UK economy after the coronavirus pandemic, including a number of programmes aimed at reducing regional economic divides.
Stephen Church, EY’s North West Managing Partner and North Markets Leader, praised a number of schemes that have directed government investment into the region. He commented:
“Through the Budget, Spending Review and recent announcements, the UK Government has pledged real action on the levelling up agenda across the UK, which is positively welcomed across the region.
“Here in the North West, the Levelling Up Fund has identified 12 places including Salford and Pendle, to benefit from over £232 million in local infrastructure improvements. Yet it is crucial that we continue to focus on our smaller towns and that levelling-up reaches all corners across the UK so, it was reassuring to see that Leigh, Marple and Clayton-le-Moors have been selected as projects within the Community Ownership Fund, with over £600,000 pledged investment.
“Further, the £5.7 bn announcement for London style transport settlements – of which £1bn and £710m will fund integrated transport system’s in Manchester and Liverpool respectively – and the early-stage proposals to reinstate passenger rail links between Ashton and Stockport; Middlewich and Gadbrook Park; and Buckley Wells and Rawtenstall, celebrate that true ‘levelling-up’ momentum is building.
“It is clear that levelling up must be delivered in close conjunction with the UK’s green economic recovery and across the North we are well placed to deliver this, with ‘Track 1’ status awarded to the first two carbon capture utilisation and storage (CCUS) developments in the North West and the North East.”
Other business leaders have argued levelling up plans have not gone far enough. Chris Oglesby, CEO of Manchester-based property group, Bruntwood, and which operates Alderley Park, highlighted the omission of announcements regarding HS2’s eastern leg to Leeds, Northern Powerhouse Rail, and associated infrastructure, such as an underground expansion of Manchester Piccadilly. He commented:
“Worryingly, another budget has passed with no mention of funding to support Northern Powerhouse Rail nor the Eastern leg of HS2. These two transformational projects would turbo-charge economic growth in the North and Midlands.
“Alongside our local transport networks, we need to see investment in intercity links – connecting Liverpool, Manchester, Leeds, Bradford, Sheffield and Newcastle; the original agglomeration thesis that drove the whole Northern Powerhouse project. This combination is what will unlock the next generation of growth in the North and rebalance the economy.
“Not investing in an underground station at Manchester Piccadilly is a mistake we will come to regret and see as a major strategic error. Without this piece of the rail-jigsaw the opportunity to properly connect Manchester, Leeds and Liverpool – attracting investment and creating jobs – will never be fully realised.”
Subrahmaniam Krishnan-Harihara, Head of Research at Greater Manchester Chamber of Commerce, however, argued that the announcements did not go far enough to support businesses struggling to rebuild after the pandemic and faced with supply chain and labour shortages:
The UK economy has undergone significant structural changes during the pandemic. Strengthening the future of bricks and mortar retail, and the ability of the high street to compete with e-commerce, is directly dependant on reworking the business rates system. The 50% discount on business rates for hospitality, leisure and retail will be received by the industry with a sigh of relief but it is disappointing that significant reforms to the business rates system has been put off.
“In many ways, the Chancellor had his task cut out for today’s Budget. He began his speech by saying that employment is growing, and wages increasing. Although there were some skills related announcements (and we are yet to delve into the details of Budget publications), the Chancellor did not acknowledge the one issue that businesses across sectors have identified as a critical barrier for their smooth operation and expansion: the severe shortage of labour. The expectation was that he would address these challenges head on and, at the same time, give wings to the levelling up promise made by the PM. Levelling up needs more than new buses and bid based grants for projects. It needs vision. It needs a long-term plan. Nearly two years after levelling up became the currency of the Conservative manifesto for the 2019 general election, we will be excused for not understanding what it is and how it will be delivered.”
Stockport-based fintech, takepayments.com, which provides card payment technology to small businesses and retailers, also warned there was little to support businesses faced with rising costs, in particular given the 59p increase in the National Living Wage. Sandra Rowley from the firm commented:
While the announcement of the rise of the minimum wage is welcomed for workers, for small businesses owners this is another cost challenge to running their business.
“On top of the increase in energy bills, increase in petrol costs, rise in inflation and the confirmed national insurance increase, this 6.6% increase would require an additional £1,000 per year for minimum wage full time workers. Whilst there is some welcome news in the budget for hospitality, the overall business environment will remain challenging for those small, independent businesses in the UK.
“One in four (28%) small business owners think the government should offer them extra support to help cover the minimum wage increase, according to our annual business trends report. This extra support could help businesses continue to contribute to struggling economy.”