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Autumn Budget 2021: Tax cuts favourable but why no mention of HS2

Tax cuts are favourable but no mention of HS2 has caused concern among West Midlands business leaders.

That is just some of the reaction from the region as the Chancellor outlines reforms to taxes such as business rates and alcohol duty but uncertainty continues to hang in the air over the eastern leg of HS2 from Birmingham to Leeds.

Henrietta Brealey, chief executive of Greater Birmingham Chambers of Commerce, said that a stronger-than-expected economic recovery from the coronavirus pandemic meant the Chancellor was able to introduce a number of favourable tax cuts.

“For a number of years, the chamber has called for reform of the outdated business rates system and it was pleasing to see the Chancellor announce more frequent valuations, incentives to encourage green investment and a freezing of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

“While we will need to study the finer details of the scheme, 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.

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“The extension of the Airport and Ground Operations Support 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 effect it’s had on driving consumer demand.

“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.”

Chris Oglesby is chief executive of commercial property group Bruntwood which owns and operates offices across Birmingham such as Mclaren and Cornerblock.

He welcomed the certainty that funding for transport across the regions would provide over the next five years but called it “worrying” that the Budget had passed with no mention of the eastern leg of HS2 between Birmingham, the East Midlands and Yorkshire.

Referring to investment, he added: “Initiatives like the £150 million for regional angel investors are a good start.

“But the government will also need to make sure that programmes like the new £1.4 billion ‘Global Britain Investment Fund’ is focussed on helping plug the gaps in regional investment too.

“With the publication of its long-awaited Levelling Up white paper still pending, the Budget and Comprehensive Spending Review have been done without a strategy.

Autumn Budget 2021: Tax cuts favourable but why no mention of HS2

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“This is not a good omen for, in this government’s own words, its ‘defining mission’. It’s hard to escape the feeling that, a few welcome initiatives aside, Levelling Up continues to amount to little more than a slogan.”

Tony Hague is chief executive of Black Country manufacturer PP Control & Automation which makes products for a broad range of sectors.

He said a change in focus around research and development had “leapt out” for him from the Chancellor’s statement, alongside a desire to incentivise more domestic activity.

“This is a very welcome change as the UK has the unenviable track record of being a fantastic idea generator yet an also-ran when it comes to commercialising these ideas and technologies.

“If we can reverse this by creating a climate where investment and capacity is available on our shores then this could be a real long-term boost for manufacturers which could be in line for new product introductions and increases in volumes.

“It’s just a shame that the £20 billion funding will not come into play until 2024. Why we’re waiting two years is a real ‘head scratcher’ especially when you consider we’re currently vying for pole position in electrification.”

Mike Cherry, who is national chairman of the Federation of Small Businesses and director of Staffordshire timber merchant WH Mason & Son, said the Chancellor was making progress on business rates but inflation and tax clouds gathered.

“This Budget has delivered some measures that should help to arrest the current decline in small business confidence.

“But, against a backdrop of spiralling costs, supply chain disruption and labour shortages, is there enough here to deliver the Government’s vision for a low-tax, high-productivity economy? Unfortunately not.

“Where inflation and forthcoming tax hikes are concerned, the clouds are gathering. It’s good to see the Chancellor embrace our recommendation for business rates reform….That said, much more will be needed to support small employers in the months ahead.”

Russell Luckock is chairman of Birmingham pressings firm AE Harris and a regular columnist with our sister newspaper the Birmingham Post.

He said: “Rishi Sunak’s budget will be good news for the hospitality industry with a range of measures designed to slow down and reverse the closures of pubs and restaurants.

“It is in line with the Government’s decision to tackle the country’s debt mountain by supporting investment in business.

“It remains to be seen whether these measures will be fruitful but it is interesting to note that the Government now accepts that four per cent inflation will last right through next year.

“I believe this is not in line with costs now being demanded for raw materials right across the board. I expect it to be much higher by next spring. As a broad generalisation, a welcome Budget.”

Andy Morris, managing director of Solihull-based housebuilding group Hayfield, said it was encouraging to see the Government making advances in more widespread renewable energy creation such as hydrogen power.

“With soaring energy price rises affecting us all, we need to lessen our reliance on fossil fuels,” he added.

“We are enthused by the proposal to digitise England’s planning system (and) support the Chancellor’s £1.8 billion brownfield housing fund and greater investment into regional transport infrastructure.

“The covid-19 pandemic has seen everyone spend more time at home than ever before. Moving to a beautiful new home with modern living space, workspace and easy access to the great outdoors remains a priority for many, especially those who are increasingly eco-aware.”

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