Budget 2024: More reaction from Greater Birmingham businesses
Greater Birmingham Chambers of Commerce members have been reacting to Chancellor Jeremy Hunt’s Budget which was announced yesterday.
Here is a selection of comments from business leaders…
John Webber (pictured), head of Business Rates at Colliers:
“As always, the devil is in the detail and today the detail revealed that the Chancellor has extended the period for which an occupier must occupy a property to gain empty rates relief from six weeks to 13 weeks.
“This is a kick in the teeth for those retail or leisure landlords who are unable to find a tenant for their property, who will end up paying considerably more in business rates for a property from which they are receiving no income. This is likely to deter property investment and values in an already distressed market.
“The Chancellor’s failure to “right the wrongs” of the 2023 Autumn Statement and cancel the business rates increases planned for April was also massively disappointing.
“Given the Chancellor confirmed today that the OBR has forecast inflation to be below 2 per cent in two months’ time, it is outrageous that all but the smallest of UK businesses will be paying increased business rates tied to a multiplier that will increase from 51.2p to 54.6p in the pound in line with the 6.7 per cent inflation figures of last September.
“This planned increase will impact 220,000 businesses who will pay an extra burden of £1.66bn in tax from April 1, 2024.
“Colliers has estimated that the businesses in the retail sector will pay over £360 million more in business rates, the offices sector around £400 million more and logistic/ industrial sector around £450 million more as a result of the increased multiplier.”
Ann Tonks, director, Chapter restaurant:
“What a lost opportunity! VAT should have been lowered for the hospitality and nighttime economy sectors, which are in the midst of an existential crisis.
“With so many restaurants, pubs and bars closing daily due to massive cost increases, the Chancellor should have heeded the calls from these sectors and a large cohort of MPs for a VAT cut to help save businesses that will now go to the wall.
“Am I surprised that our pleas have fallen on deaf ears? Unfortunately not, as the value of our sectors to communities and the economy is being ignored by this government.”
Tony Elvin, general manager, Touchwood shopping centre:
“Hugely disappointing to see the government ignore pleas from both hospitality and retail in this year’s budget.
“No cut in VAT for hospitality and no tax-free shopping for overseas visitors. Two policies that would have helped retail and hospitality businesses deliver even more towards our economic recovery.
“It is a short-sighted approach from a Government that claim to be the party of business.
“Regarding the failure to deliver a cut in VAT for hospitality businesses, we will now see a further rise in closures for businesses that have found themselves with an unsustainable cost base.
“Businesses that, due to their failure, will no longer contribute towards business rates, VAT, corporation tax and employment.’
David Morris, Midlands regional market leader at financial services firm PwC:
“The announcement to provide £15 million to the West Midlands Combined Authority to support culture, heritage and investment projects is welcome.
“The region has benefited over the last two years from the financial incentives of the investment zones and freeports, resulting in the West Midlands ranking as the top region out of London for foreign direct investment in 2023.
“Continued investment is needed to maintain the momentum in the region and achieve economic growth.
“Additionally, further devolution deals, including in Warwickshire, will give powers to local authorities to make decisions that are best for regions.
“The Chancellor stated that two thirds of salaried jobs have now been created outside of London and the South East, highlighting the growth and economic potential in the regions.”
Nick Latimer, Private Clients partner, Crowe:
“The residential property sector saw further tax changes in the Budget– a regular destination for the government to make changes to either boost or dampen the sector.
“Abolishment of multiple dwelling relief for SDLT from June 2024 was a surprise, removing some abuse in the system, and will increase the cost of transactions involving a purchase of 2-5 dwellings and save £385 million of tax a year – mostly relating to those with annexes on their homes.
“Furnished holiday lets are also in the Chancellor’s cross-hairs, with proposed abolishment of the status from April 2025, resulting in potential restrictions on loan interest relief, and the removal of favourable rules around capital gains tax and income tax deductions.
“This was partly offset by a reduction in the top rate of capital gains tax on residential property disposals from April 2024 from 28 per cent to 24 per cent which may help boost investment from overseas.
“Overall, there were some significant changes across a range of taxes announced in by the Chancellor today, including the abolishment of non-dom status from April 2025, which could see changes for property investors and operators.”
Anja Beriro, partner in Browne Jacobson’s Government and Infrastructure team:
“It is widely recognised that local government budgets are already incredibly stretched, with a wide variety of pressures resulting in several councils filing Section 114 notices in recent months and others at significant risk.
“We’re reaching a crunch point where, unless the overarching position changes and funding is made available from somewhere, a lot of critical services will begin to topple.
“For local authorities, while the long-term plan will involve a thorough assessment of how to make productivity gains in line with the Government’s vision, in the short term they must explore where further savings can be made with the least possible impact to their statutory duties.
“In this respect, they should maximise the use of existing internal resources such as monitoring officers, which are responsible for legal governance, to ensure any changes made can’t be legally challenged.
“Some very difficult decisions must be made in the coming months, whether it’s the future of revenue-driving assets that could be sold to bring in income, staff requirements, or social and childcare services.
“Throughout this process, it’s crucial that local authorities don’t rush into any decisions that will have a profound impact on their communities for years to come without considering all the potential consequences that may not be immediately apparent.”
Stephen Deakin, chief executive, BCRS Business Loans:
“We are delighted the Recovery Loan Scheme (RLS) will continue and welcome the Chancellor’s announcement as the scheme has proven to be an essential tool to unlock small businesses growth.
“Our ethos at BCRS is that no viable business should go unsupported so the extension will allow CDFIs like us to lend to under-served but viable companies, many in communities which are starved of investment.
“We are pleased the Government has listened to the calls from CDFIs, impact investors and business representatives including our national membership body Responsible Finance to extend the scheme, which has delivered value for money.
“Small businesses need the right finance at the right time to develop, support jobs and create opportunities. By having delivered £14.7million through 188 loans since 2020 we have enabled the RLS to provide help for West Midlands businesses when they needed it most in times of unprecedented challenges.
“Knowing the scheme is continuing will enable CDFIs to secure more investment, support more small businesses and create jobs, opportunities and prosperity in communities.”
Andrew Bostock, office senior partner for KPMG’s Birmingham office:
“The announcement of further support to develop skills for the manufacturing sector - a follow up to the initial funding announced in the last Autumn Statement - has the potential to bring significant benefits to the Midlands region.
“As a provider of local jobs, the Midlands’ growing creative industry will also welcome the news that the Chancellor will provide higher tax reliefs and a discount on business rates. With better access to funding, the West Midlands will be best placed to establish itself on the world stage as a leader in TV and film production.
“While the announcements go some way in encouraging growth for some industries, businesses will be looking for more economic certainty over the course of the next year before they feel confident in making investments.”
