The Chancellor’s plans to provide the “biggest ever boost for business investment” through his Autumn Statement have been cautiously welcomed by Staffordshire Chambers of Commerce.
However, the organisation says more must be done to support companies as they face persistent economic headwinds in light of new figures forecasting a sharp downgrade in growth and stubborn inflation.
In the keynote statement, Jeremy Hunt announced a number of measures ranging from a 2 per cent drop in National Insurance from January, through to multi-million-pound investment in key sectors like manufacturing and emerging industries such as AI.
He also announced a decision to make “full expensing” permanent, a tax break which allows businesses to deduct the full cost in machinery and equipment from their tax bill.
This, and many other reforms announced yesterday, were called for in a letter sent to Mr Hunt by the Chamber, as reported in Daily Focus.
They included extra investment in the energy grid network, reform of the creaking planning system and extended tax relief for the hospitality and retail sectors.
Staffordshire Chambers Policy Adviser Declan Riddell, pictured above, said: “Some of the announcements today are welcome but it is still challenging times for many of our businesses.
“I think the devil is always in the detail, so we will have to wait to see how these policies are rolled out and the effect they have.
“For instance, we called for more help with the planning system as it was taking too long to get decisions turned around and that has acted as a brake on investment from business.
“The Chancellor has announced that local authorities will be able to recover the full cost of planning applications if they meet deadline turnarounds.
“That is an incentive to turn things around quicker but that can only be done with the right level of staff in place, so there are implications there. But it is good it is being looked at.
“The permanent full expensing is something we called for in our letter to the Chancellor, so that is a welcome. It means if a company spends £1million in a year on things like machinery, commercial vehicles and plant they can claim back £250,000.
“In our letter we said we felt businesses were holding onto their money so we need incentives like this to encourage them to invest.”
Declan added: “We also called for a wider review of the business rates system, which is still very much on our wish list.
“But it was announced that the small business multiplier is being frozen for another year and that business rates discounts were being extended for the hospitality and leisure sector.
“Likewise, freezing alcohol duty until next August will provide a welcome boost for our restaurants and pubs.
“The Chancellor also touched briefly on investment in the grid, so we will wait to hear further on that.
“We know of Staffordshire companies who generate their own energy but are unable to transfer surplus energy back to the grid because they have been told to stump up the cost of improvements to the infrastructure first.”
Just prior to the Chancellor making his statement, the Office for Budget Responsibility released figures showing a downgrade for economic growth in 2024 and 2025. 2024 has gone from 1.8 per cent to 0.7 per cent while 2025 has shrunk from 2.5 per cent to 1.4 per cent.
Inflation is also forecast to drop to 2.8 per cent next year, only falling to the 2 per cent target set by the Bank of England in 2025.
Declan added: “The economy is certainly facing a challenging time – I can’t see these economic headwinds dying down until 2025 so businesses are operating against a challenging back drop and conditions.
“So we do need to see the Government strive to improve the macro-economic situation – including a push to get interest rates back down.
“The economy hasn’t slipped into a recession as was forecast at the start of the year but it remains very sluggish, so support is needed to get it firing on all cylinders again.”
