Lack of action to cut taxes for businesses says chamber chief

Chief executive Sarah Moorhouse said it had given businesses a reality check about the options being taken by the Government to help businesses stabilise and start looking forward with a little more clarity.

She said some of the announcements would be given a cautious welcome by Black Country businesses, who had realistic expectations about the likely changes that could be made given the challenging economic environment.

"The announcement of a further cut to National Insurance and extension of the freeze on fuel duty will help consumers and employees of companies who have felt massive pressures in recent years around interest rates, the cost of living, inflation and the uncertain outlook.

"Changes such as reducing National Insurance will help staff, particularly lower paid workers, given the price rises seen over the last two years.

"Our members will have been hoping for greater positivity around taxation for businesses in order to plan future progress, which was in short supply."

She said that businesses needed to feel more confident against a backdrop where they worry about recruitment, wage inflation and rising energy costs, all of which they saw as barriers to growth.

"They would have hoped for even a small reduction in corporation tax which could allow them to invest in their team, secure new equipment or support employees still struggling with the cost of living.

"The announcement of a two-year extension to the Recovery Loan Scheme, launched during the Covid pandemic to support small businesses, is a positive step to allow companies to access finance in challenging times.

"Our most recent survey showed Black Country businesses bucked the national trend around confidence, with the Quarterly Economic Survey for Quarter 4 showing 71 per cent of firms believed turnover will improve in the next 12 months, up from 55 per cent three months earlier and ahead of British Chamber of Commerce’s national 56 per cent of firms.

"After the economy entered recession, it will be interesting to track member sentiment in the months ahead following the Budget and with a general election ahead of us," added Mrs Moorhouse.

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.”