Chancellor 's statement: Government must keep options on table - Chamber

Business leaders in Greater Birmingham say the Government must keep a variety of options on the table to ensure businesses from all sectors are supported through the cost of living crisis.

Chancellor Kwasi Kwarteng 's mini-budget included some measures to reassure businesses - such as the reversal of planned National Insurance increases and an emphasis on stimulating growth.

Mr Kwarteng also cancelled the planned rise of corporation tax, which now stays at 19 per cent, and revealed “early discussions ” to create investment zones, which will have tax incentives for businesses.

Other announcements included:

• The 45 per cent higher rate of income tax will be abolished
• A cut in stamp duty. Nothing will be paid for first £250,000 of property's value - double the current amount allowed
• Household bills to be cut by an expected £1,400 this year with aid from energy price guarantee and £400 grant
• Total cost of energy package, including business support, over next six months estimated at £60bn
• Cap on bankers' bonuses to be lifted as part of efforts to "reaffirm" the UK's status as a financial services hub
• New legislation to cut restrictions on building new roads, rail and energy infrastructure
• The introduction VAT-free shopping for overseas visitors
• Making permanent the temporary £1 million level of the Annual Investment Allowance (AIA), which was due to expire after 31 March 2023
• Planned duty rises on beer, cider, wine and spirits cancelled

Greater Birmingham Chambers of Commerce said that while moves to stimulate investment and reduce overheads were welcome, more measures are still required to help firms in hard-hit sector such as hospitality.

Henrietta Brealey (pictured), chief executive of the GBCC, said: “Depending on the business in question, there will be very different views on the Chancellor 's Growth Plan.

“On one hand, there were quick actions to help businesses with their overheads and stimulate investment through the reversal of the increase in National Insurance Contributions (NICs) - a key action called for by the Chamber, increase to the annual investment allowance threshold, and eye-catching moves on Investment Zones.

“VAT-free shopping for overseas tourists is also a welcome move to support the visitor economy post-Covid restrictions. Reducing the burdens of IR35 legislation is also a welcome focus for encouraging self-employed people back to the jobs market.

“Though the Government is hoping that keeping Corporation Tax at 19 per cent - rather than the planned rise to 25 per cent - will drive further foreign investment, this measure will do little to help those firms that are struggling to turn a profit and still dealing with debts accrued during the pandemic.

“A number of our hospitality members tell us that even with the energy price cap and reduction of NICs, they are facing unsustainable overheads this winter. It is imperative that more steps are taken to support businesses of all sizes and across all sectors as record levels of inflation continue to bite.

“Government must keep a number of options on the table. We urge the Government to swiftly introduce VAT relief for struggling hospitality businesses and non-essential retailers, continue reform of the business rates system and expand the Shortage Occupation List to directly help those businesses most impacted by the current economic environment. ”