‘Make sure South West has fair share of funding’
BUSINESS organisations in the West have urged Chancellor Rishi Sunak to maintain some Covid support measures ahead of today’s Budget.
Although many of the spending pledges Mr Sunak is poised to reveal have been widely previewed – something that earned him a rebuke from Speaker Sir Lindsay Hoyle – many of the more painful measures will emerge today.
He is expected to end the yearlong public sector pay freeze for more than five million public sector workers and raise wages for people on low incomes from £8.91 to £9.50 an hour.
But Labour critics have said the recently announced hike in National Insurance Contributions to 1.25% and a freeze to the personal income tax allowance could leave some worse off.
Business minister Paul Scully said yesterday the economy was going through a “difficult time” in terms of cost-of-living pressures.
“The 6.6% increase is quite a substantial increase of the national living wage. It is still keeping us on target to end low pay by 2024,” he told the BBC.
“But it has to be balanced by businesses themselves because if we choke off the recovery then that’s going to reduce the number of jobs, reduce the number of opportunities for people on low pay.”
But what would the business community like to see from the Autumn statement?
Claire Ralph, policy manager of South West chamber of commerce Business West, said the Government needed to make sure its Covid support matched business needs, especially if restrictions to trading are reimposed on public health grounds.
“Businesses remain vulnerable, with depleted cash reserves, high inflationary pressures and paying down Covid-incurred debt such as bounce back loans,” she said.
She also called on the Government to make sure it provided the South West with its “fair share” of funding as part of its so-called ‘levelling-up agenda’.
“Key issues like investment for local transport, investment in flooding defences, particularly for central Bristol where it is currently holding up several big redevelopment decisions, and money to help Bristol Temple Meads complete its long overdue overhaul, are all critical things on the local wishlist here.”
Ms Ralph has also called for reform of the business rates system, which she said was continuing to act as a “real drag” on the region’s high streets, dampening growth and investment.
“Budget day always gives a profile to the popular spending announcements the chancellor wants to claim credit for,” she said.
“But given the tougher fiscal environment due to the battering of Covid, a squeeze in other areas is more likely. Business will be keeping an eagle eye out for any unwelcome surprises.”
Phil Smith, managing director of Business West, said he had seen “little to excite business” so far in the preliminary Budget leaks.
“The Government seems to be exhorting business to invest but at the same time taxing them next year,” he said. “Business rates badly need to be reformed but there is no sign of that happening.”
Mr Sunak is expected to announce £1.6 billion to roll out new T-Levels for 16 to 19-year-olds, and £550 million for adult learning in England as part of a plan to boost skills.
There will also be £830 million extra funding announced in the Budget as part of a five-year scheme to refurbish colleges.
Mr Smith said the funding boost for colleges would be welcomed by higher education institutes.
Sara-Jane Watkins, principal of South Gloucestershire and Stroud College, agreed. She said with businesses finding it hard to recruit, colleges were playing an “important” role with apprenticeships – and called for an increase in the base rate for 16 to 18-year-old learners.
“A base rate increase is the only way of recruiting and retaining quality vocational delivery staff who are so needed to inspire the next generation, especially in areas of digital, construction and health.”
Dorset Chamber chief executive Ian Girling said it was “crucial” the chancellor made the “right decisions” on investment, tax and support.
He said the UK was at a “critical point” in its economic recovery from the pandemic.
“Helping businesses survive and get back to growth is critical to the nation’s hopes of economic recovery and long-term prosperity,” he said.
“Supply chain problems persist and severe recruitment challenges remain in many sectors while there’s huge pressure in terms of rising costs as the spectre of higher inflation continues to loom large.”
A spokesman for Somerset Chamber of Commerce, meanwhile, called on the Government to map out a recovery plan for businesses facing the challenges of increased costs, supply chain difficulties and staffing shortages.
“Businesses need increased support, not additional taxes,” the spokesperson said.