'Game-changing interventions' and 'missed opportunities' - West Midlands business leaders react to the Autumn Statement

Business leaders in the West Midlands have been reacting to today's Autumn Statement from Chancellor Jeremy Hunt.

"A missed opportunity" for the hospitality sector was how one person described it but another said some of the measures would "land well" with the business community.

One key announcement for the West Midlands was the news of a new investment zone focused on three areas of economic growth - you can find out more about that here.

A full rundown of the some of the key measures announced today can be read here but in summary:

• National Insurance has been cut for 27 million people, with a reduction in headline rates for employees and the self-employed. The two per cent cut to ten per cent is worth £450 a year to someone earning the average £35,000 salary
• More than three million workers are set to get an £1,800 pay rise because the national living wage is going up by £1 an hour to £11.44 from April 2024
• From next year, local councils will be able to recover the full costs of planning applications provided they meet prompt deadlines. Mr Hunt said proposals were being readied to bust the planning backlog
• As part of a plan to cut business taxes, the full expensing scheme allowing firms to write off the cost of spending on new machinery and equipment from profits will be made permanent instead of expiring in 2026

Catch up on all the news and reaction from across the UK with our Autumn Statement 2023 Live Blog

Reaction from West Midlands business leaders

Henrietta Brealey, chief executive of Greater Birmingham Chambers of Commerce, said several of the measures in today's Autumn Statement would "land well" with firms battling cost pressures following a turbulent period.

"It was pleasing to see the Chancellor back a number of our calls in a bid to drive investment and reduce cost pressures - namely the move towards full expensing, restructuring of pension funds, reforming the R&D tax reliefs system and extending business rate relief for hospitality and retail firms.

"It was also reassuring to see the Chancellor commit to plans to simplify the planning process in order to speed up the delivery of infrastructure projects. Given the current labour market pressures, additional funding for apprenticeships is also welcome, however, offering businesses more flexibility on how they spend their levy funding would have made the measure even more effective.

"In particular, the confirmation of the West Midlands investment zone is a major boost for the region, creating thousands of jobs for local people and offers a vital opportunity to leverage private sector investment."

James Dickens, managing director of Birmingham-based housebuilder Wavensmere Homes said today's statement signalled a change of direction but there was too much flirting around the edges.

"We were hopeful of a reduction in corporation tax and are disappointed this hasn't been implemented," he said.

"Following last month's dramatic reduction in core inflation, we do welcome the Treasury's reductions to National Insurance and the 6.7 per cent Universal Credit increase for those on the lowest incomes. Hopefully, the overall focus on improving business productivity should see the OBR's revised-down growth forecasts for 2024 and 2025 improve

"As a Birmingham-based housebuilder, we also welcome the Investment Zone announcements for the West and East Midlands, which is where the majority of our live schemes are located. We look forward to seeing how the 'mini Canary Wharfs' are to be delivered."

Nikki Paterson, Midlands director for business body the CBI, said the Chancellor was right to prioritise "game-changing interventions" that will fire the economy.

"While the move on National Insurance will give hard-pressed households some much-needed breathing room, making full capital expensing a permanent feature of the tax system can be transformational for accelerating growth and improving living standards in the long-term.

"Helping firms to unleash pent-up investment is critical to getting momentum into the economy. Making full expensing permanent will give firms the stability they need to press on with decisions on investment whilst keeping the UK at the top table internationally for investment incentives."

Lyle Bignon works as night-time economy adviser in Birmingham, working on behalf of the Night Time Industries Association.

He said today's statement was "a missed opportunity to support the UK's fifth biggest industry".

"Despite the advice of leading night-time economy advocacy groups and industry bodies such as the Night Time Industries Association, which represents over 10,000 members across the country, the Chancellor has chosen to pursue policies which ignore the livelihoods of hundreds of thousands of hard-working people that power the UK's out of home leisure, and late night economies.

"The freeze on alcohol duty is a temporary fix which in isolation will barely scratch the surface in tackling the night-time economy's serious challenges for growth. However, we fully welcome the extension of business rates relief which may make the difference between some businesses - in particular, venues - staying afloat in the next financial year.

"During the current cost-of-living crisis, and with geopolitical events including the ongoing energy and fuel poverty crisis projected to continue well into 2024, the night-time economy needs more support from the Government and local authorities to simply survive, let alone grow.

"One of the biggest disappointments in Hunt's statement is no VAT relief, both of which would be lifelines to businesses struggling under extremely challenging market conditions."

Sam Mitchell, chief executive of Solihull-based online estate agency Purplebricks, said that by failing to cut stamp duty and cut it permanently, the Government had missed an opportunity to set the already fragile housing market on a clear path to recovery.

"Rumours will now grow that we will see a cut in the spring, meaning decisions on buying and selling will be delayed and the economy will suffer," he said.

"This has already been a difficult year for the property sector and the lack of support will threaten a recovery in 2024. Despite this, the silver lining is the confirmation of the extension to the mortgage guarantee scheme.

"Not only does this support the green shoots we are already seeing in the lending market but is great news for first time buyers, especially if coupled with the declining rates we are seeing in the market."

"After decades of being in the shadows of universities, it was refreshing to see vocational learning play such a prominent role in the Chancellor's speech today," says Bekki Phillips, chief operating officer of Walsall-based training provider In-Comm Training.

"The headline will no doubt be the £50 million additional investment in pilots that encourage more apprenticeships into engineering and manufacturing. This is music to our ears. It was also pleasing to see an increase in wages for apprentices for their first year of training.

"This is significant and will mean that vocational learners will be further valued as members of the workforce rather than, what has traditionally happened, been regarded as cheap labour. Hopefully, this will encourage youngsters to embark on an apprenticeship rather than seek employment in areas, such as fast food and retail - sectors that might offer immediate higher returns but fewer long-term prospects.

"If there was one thing missing from the skills announcement, it was the urgent need to take the training levy a step further so that it goes beyond apprenticeships and fund qualifications and courses specific to industry needs.

"These are niche courses but vital if manufacturers are going to bridge the skills gap and tackle the need for emerging skills, such as robotics, automation, machine learning and augmented reality."

Neil Rami, chief executive of inward investment agency West Midlands Growth Company, said the confirmation of a new investment zone was yet another "vote of confidence" in the region's strong innovation credentials and research assets.

"Key to maximising the success of this programme will be bringing high-value investment from around the world into these sites," he said.

"We are making good headway on this already through a new West Midlands international strategy and this announcement will enable us to accelerate our progress and ensure it benefits as many people as possible from across our region."

Tony Hague is chief executive of Walsall-based PP Control & Automation, an outsourcing firm which work with large machinery builders.

"I've been relentless for many years about the need for the UK to invest in more automation and technology and the full expensing announcement today could well be a significant driver in tipping the balance," he said.

"It should promote much-needed investment to drive productivity and increase efficiencies, offsetting rising input costs around materials, energy, transport and labour.

"Like all announcements, there is a 'but'. If the Government changes in the next election, will this important business decision be reversed by new ministers keen to make their own mark on proceedings?

"The Autumn Statement was a huge improvement on the last mini budget - at least I never thought 'oh my god, it's like a Liz Truss moment."

Chris Romans, Midlands head of tax with financial services giant EY, said: "The announcement of new investment zones in the West and East Midlands is positive news for the region. Both zones will play an important role in not only creating new jobs but also upskilling workers across the value chain.

"This news, in conjunction with the announcements made earlier on in the year during the Spring Budget around the freezing of rates for businesses moving into the zones, highlights the potential of investment for businesses in the region. We look forward to hearing more details about the two zones, and how they will benefit the region's businesses."

Corin Crane, chief executive of the Coventry and Warwickshire Chamber of Commerce, said the investment zone "could be a real game changer" for the region.

"We know how important that site is around Coventry Airport and this could have a massive impact for the regional economy."

He added: "We, alongside our colleagues at the British Chambers of Commerce, campaigned for the full expensing to become permanent and that was announced in the Chancellor's statement.

"There were other measures that were also welcome, such as the extension of Business Rates relief for those firms in the hospitality and retail sector.

"Of course, the devil will always be in the detail when it comes to this kind of statement and even the financial professions around the table need more time for fully assess the implication of the measures but the Chancellor set out plans for growth which our members will always want to hear."

David Morris, Midlands regional market leader with financial services firm PwC, said: "The announcement to extend the financial incentives of the investment zones and freeports from five years to ten years is a welcome one.

"Both the East and West Midlands economies have benefited from these initiatives, including the West Midlands ranking as the top region out of London for Foreign Direct Investment in 2023.

"Additionally, the introduction of a new investment zone for advanced manufacturing in the West Midlands will provide a boost to the local economy, supporting one of the region's industry hubs."

Richard Harpin is the founder of Walsall-based home repairs company HomeServe and chairman of trade website Checkatrade.

He said: "It's good news for skills today with £50 million spent over the next two years to increase apprenticeship numbers, particularly in areas where there is a shortage. That is positive progress for trades. We know there is a big skills gap to beat in the construction industry.

"Today's increase in the National Minimum wage is also great news for young people thinking about starting a trade career. Wages for young people and apprentices will rise by 14.8 per cent for those aged 18 to 20 and 21.2 per cent for those aged 16 to 17.

"It would be great to see the Government build upon this announcement by cutting red tape, redirecting apprenticeship levy funding more effectively and reinstating the apprenticeship incentives scheme which have proved so successful over recent years."