Tax cuts welcome but budget falls short - Chamber

Business leaders in Greater Birmingham largely welcomed the Chancellor 's Budget after he introduced a number of favourable tax cuts but they warned of a number of shortcomings.

Greater Birmingham Chambers of Commerce (GBCC) welcomed positive moves on business rates, some measures to encourage investment and a cut in costs on sectors impacted by Covid, infrastructure spend and skills.

But Henrietta Brealey (pictured), the GBCC 's chief executive, said the fundamental reform business rates needed in the long term and the Integrated Rail Plan, including certainty on HS2 phase 2b, were notable by their absence.

She added: “All in all it is a decent budget for businesses but worth noting that corporation tax and NI increases still remain on the horizon

“With a stronger than expected economic recovery, the Chancellor was able to introduce a number of favourable tax cuts that will ultimately help those businesses that are still struggling with the effects of the pandemic.

“For a number of years, the GBCC has called for reform of the outdated business rates system and it was pleasing to see the Chancellor announce more frequent valuations, incentives to encourage green investment and a freezing of the multiplier.

“It was also good to see that business rates would be slashed for those operating in the hospitality, retail and leisure sectors - a development that will no doubt be cheered by those businesses that suffered huge losses as a result on enforced closures during the crisis.

“The extension of the AGOSS (Airport and Ground Operations Support Scheme) scheme is also a sensible step and will offer a timely boost to anchor institutions such as Birmingham Airport that have been rocked to their core over the last 18 months.

“The freezing of alcohol duty will also help those in the hospitality sector. However, we would urge the Government to go further and maintain an open mind on keeping lower levels of VAT in place for the long term given the positive impact it 's had on driving consumer demand.

“The additional investment in skills training is also welcomed - for years, economic output in our region has been hindered by skills gaps and greater levels of investment will help bridge the gap between ourselves and more prosperous parts of the country.

“Greater investment in local transport networks is also something that 's long overdue. However, it was disappointing that the release of the IRP has been delayed again - if the Government 's much vaunted Levelling Up Agenda is to be realised then we need to see transformative projects such as HS2 and the Midlands Rail Hub delivered in full.

“Nevertheless, much of the Chancellor 's strategy has been predicated on a sustained economic recovery and as Mr Sunak admitted himself, the spectre of higher Covid case rates and a sharp rise in inflation could still cause huge problems for businesses during the winter.

“In light of this, we would urge the Treasury to commit to an appropriate level of financial support if national restrictions are re-introduced otherwise a number of businesses could be left facing a bleak future. ”

For more details on what the Budget means for business click here.