Staffordshire’s business community has laid out its hopes ahead of today’s Autumn Budget – addressing everything from decarbonisation schemes to capital investment allowances and welfare system reforms.
Chancellor of the Exchequer Rachel Reeves will deliver her second budget in the House of Commons with speculation rife about tax rises, salary sacrifices being capped and a new ‘mansion tax.’
Yesterday evening, the Treasury confirmed that minimum wage rates will increase next year – both rising above the anticipated rate of inflation.
Jane Gratton, deputy director of public policy at the British Chambers of Commerce, reacted by saying: “People are at the heart of every thriving business, and employers want to ensure their workforce is happy, engaged and well paid.
“However, every above-inflation wage increase leads to higher business costs, lower investment and fewer opportunities for individuals. Making employment more expensive risks deepening the jobs crisis among young people.”
She said that the Government needs to use the Budget to ease cost pressures for business, adding: “Crucially, there must be no new tax increases for businesses.
“Instead, the Chancellor must invest in growing the economy, enable firms to create more opportunities, and tackle the ongoing skills crisis.”
In October, Staffordshire Chambers of Commerce urged the Chancellor to take urgent action to ease the growing pain felt by employers from rising taxes, wage costs and policy uncertainty and to deliver a Budget that ‘backs enterprise and growth.’
Ceramics UK has asked five things of the Government, with action on the UK Emissions Trading Scheme sitting at the top of the list.
The Stoke-on-Trent-based trade body has also raised concerns over proposed changes to Landfill Tax, business rates for large factories, any switches in levy from electricity to gas, and wants the Government to address the British Industry Supercharger scheme, which sees 90 per cent of the sector grappling with the highest industrial electricity prices on the planet.
Chief executive Rob Flello said: “Ceramics manufacturers are committed to achieving net zero, but we need a realistic pathway and the technologies required for deep decarbonisation, such as electrification, hydrogen, bioenergy and carbon capture, simply aren’t viable right now.
“We need to maintain current levels of free allowances until suitable options are available, but if the UK ETS continues to tighten without that support, we risk losing jobs and investment to countries with weaker climate policies.”
Cheslyn Hay-based PP Control & Automation (PP C&A) says it, like many other UK manufacturers, are ready to invest but global competitiveness headwinds and extreme cost pressures are creating a genuine risk to domestic production.
The manufacturing outsourcing specialist’s CEO Pinaki Banerjee wants the Chancellor to consider ensuring capital investment allowances covers leasing as well as the purchase of new machinery.
Pinaki is also hoping for targeted business rates relief or tax incentives for firms investing in low carbon, energy efficient technologies and processes.
He said: “We see this budget as a pivotal moment. The Chancellor has the opportunity to promote industrial confidence and push aside austerity or drift.
“If policy signals wobble, there is a real fear of de-industrialisation and, sadly, this will result in investment relocating abroad, lost jobs and weaker regional growth.
“As a world class manufacturer supporting some of the globe’s largest machine builders, we would love to see schemes that help industry compete extended and further investment in skills and training specifically for value added manufacturing ringfenced. The latter is vital if we are going to secure the talent pipeline required to grow.”
Also speaking out ahead of the budget, businessman Mo Chaudry, who owns a portfolio of businesses in the finance, health and fitness sectors, has claimed the country’s economic system is fundamentally broken.
He believes in a need for a tax system that is ‘fair’, a welfare system that ‘empowers not stifles,’ and a culture that ‘supports ambition, not suffocates it.’
Asking the Government to ‘stop punishing success and start championing it’, he said: “My issue isn’t about paying tax, far from it. My issue lies with a system that puts disproportionate burden on entrepreneurs, who create jobs, who take risks, forge success, and drive growth – but then expects them to carry the economy on their backs.”
Addressing the welfare system, he added: “Support those who genuinely need it, that goes without saying but we have to be brave enough to reform a system that traps people instead of freeing them. Welfare should act as a springboard to enable people to achieve, not a settee for them to languish.
We need a cultural shift. Because the truth is simple: You can’t build a productive country with an unproductive culture.”
Nick O’Donovan, senior lecturer in political economy and public policy at Keele University, has categorised three things to watch out for as ‘tax rises and sweeteners’, ‘ripping off the plaster’ and ‘the kids are alright (or not)’.
He says the budget is certain to raise taxes, but suggests sweeteners might minimise the pain, at least for certain groups.
He said: “Labour’s time in office has been characterised by a steady drip-feed of bad news. Starmer and Reeves will want this bad news budget to build up enough of a fiscal buffer to weather whatever the next few years may throw at them.”
Nick added: “For most of the last 15 years, working-age households have bore the brunt of tax rises and spending cuts. Will this Budget reverse that trend, or will younger generations face an ongoing squeeze on their standard of living?”
