Chancellor Jeremy Hunt this afternoon unveiled his last Budget before the General Election - so what did businesses in and around Birmingham make of it?
Among the headline announcements were:
Andrew Bostock office senior partner for KPMG’s Birmingham office, described it as: “A promising start for job creation in the region.
"The announcement of further support to develop skills for the manufacturing sector - a follow up to the initial funding announced in the last Autumn Statement - has the potential to bring significant benefits to the Midlands region.
“As a provider of local jobs, the Midlands’ growing creative industry will also welcome the news that the Chancellor will provide higher tax reliefs and a discount on business rates. With better access to funding, the West Midlands will be best placed to establish itself on the world stage as a leader in TV and film production.
“While the announcements go some way in encouraging growth for some industries, businesses will be looking for more economic certainty over the course of the next year before they feel confident in making investments.”
Rowan Crozier, CEO of Brandauer, a Birmingham-based metal pressings and tooling specialist, said: “For a company that has invested more than £2m in the last eighteen months, we are in favour of any incentives that make those commercial decisions easier. Full expensing is definitely one of those and I’d love to see draft legislation on extending it to leased assets passed quickly.
"This, combined with falling inflation, creates a more welcoming climate to direct company cash into people and new technologies.
"I was a bit disappointed to see a complete lack of focus on supporting companies who export in the post-Brexit world. Thousands of us are defying more bureaucracy, complex tariffs, and unequal playing fields to fly the flag for UK manufacturing and bring GDP back into this country.
"It would have been nice to see some additional support or financial incentive introduced to make international trade more accessible.
"I will always bang the drum for this illusive Industrial Strategy. I wasn’t expecting it to be included in this budget, but the government, regardless of party, must find a way of creating a strategy that is locked in place for 25 years and transcends all political bias.”
Matt Buckingham, Practice Lead for Grant Thornton in Birmingham, said: “Skills has come out as a top priority for businesses across our latest survey, as the market continues to compete for talent.
“But as businesses can, generally, already deduct 100% of staff training and development costs against their taxable profit, and we were not expecting the government to go further and introduce a super deduction.
“This Spring Budget was expected to be a quieter affair with regards to R&D, after last year’s Autumn Statement confirmed the government’s wide-reaching review - which has been ongoing since 2021 - has now concluded.
“And while tax incentives for green investment would help to reduce costs for businesses investing in energy efficient and low or zero carbon technology, as part of their environmental strategies, the chances of green tax incentives were looking slim.
“The Chancellor kicked off 2024 signalling his desire to cut taxes further, observing at Davos the benefits that low-tax economics bring to growth and the creation of dynamic economies.”
Chris Romans, EY Tax Leader for the Midlands, said: “The Chancellor’s Budget announcements included 14 tax cuts and 16 rises, but the two stars of the show – the National Insurance cut and the replacement of the Non-Domicile regime - had been heavily trailed in the days before.
“Beyond National Insurance and the Non-Domicile regime, the Chancellor chose to cut tax sparingly, with two other big measures introduced: the fuel duty freeze which was fully expected, and the reform of Child Benefit onto a household basis.
"The remaining cuts were scattered broadly, including the just-above-inflation increase (ignoring the previous years of freezes) in the VAT threshold; the four percentage point cut in the rate of Capital Gains Tax on private dwellings (which apparently actually raises money for the Exchequer); additional relief for visual effects; and a brand new UK ISA.
“After initial announcements during last year’s Spring Budget, the Chancellor failed to provide any further details about the proposed Enterprise Zones in the Midlands. Businesses will be eagerly waiting for news about the zones, the expected investment and how the region will benefit as a whole.”
Rebecca Durrant, National Head of Private Clients at Crowe, said: “In possibly the most interesting Budget for private clients in a while the Chancellor shied away from an outright cut to income tax but announced a further two percentage point decrease to National Insurance, meaning from April this year the average worker will save £900 per year.
“There was still no movement on the tax bands meaning that due to continued fiscal drag, Britain is still on course to hit a record level of tax take since the 1950s.
“The ‘tax cut’ will be paid for by scrapping the preferential tax regime for non UK domiciled individuals. This is to be replaced with a more modern, residency-based regime to encourage those wealthy individuals to bring their assets to the UK in a two year transitional period.
"Whether this will be enough to ensure they stay in the UK remains to be seen."
Greater Birmingham Chambers of Commerce called for a series of measures from the chancellor:
Raj Kandola, director of external affairs at Greater Birmingham Chambers of Commerce, said: “With a general election on the horizon, it’s no surprise to see that the Chancellor has used the limited fiscal headroom at his disposal to push for headline grabbing tax cuts – it’s just a shame that more weren’t prioritised for business given the widespread challenges many are still facing.
“In short, it was pleasing to see more funding for childcare to tackle labour market shortages and further reform of the pension market to unlock investment.
“Additional funding for the WMCA to support cultural initiatives is also helpful given the current challenges the sector is currently facing in Birmingham.
“However, there was very little announced that will help to alleviate the huge cost pressures that firms continue to face on a daily basis.
“Continued reform of the business rates system, a proper review of the VAT threshold and introducing the equivalent National Insurance cut for employers would have offered many firms an immediate boost, driven job growth and firm level investment.”
With the government announcing a sizeable cash boost for British manufacturing and research and development (including EVs and pharmaceuticals), there’s potential for huge growth in some of Britain’s most exciting and innovative sectors, accordingto to Melissa Snover, Founder and CEO of 3D printed functional food manufacturer, Rem3dy Health.
“The announced investment into key innovators and creators in the manufacturing industry is a substantial step in the right direction for nurturing growth in key contributing sectors.
“It’s incredibly encouraging to have the government express their recognition of the impact strong manufacturing and R&D can have on the wider UK economy when it comes to growth, export, employment, and innovation.
"As the CEO and Founder of Remedy Health, a fast-growth Health Tech manufacturing company utilising additive and advanced methods to personalise preventative and curative health solutions, I commend the Chancellor's announcement of a significant investment package in the UK’s life sciences and manufacturing sectors.
"This investment not only reflects the government's commitment to economic growth but also underscores the importance of innovation in improving health and overall economic resilience."
