A Spring Budget with few surprises has been described as ‘underwhelming’ by one Nottinghamshire business, while others praised the stability it provided.
Chancellor Jeremy Hunt today (March 6) announced plans to cut National Insurance by 2p, down to 8p, which he said would leave the average worker £450 better off a year.
He also raised the threshold for child benefits to £60,000, froze alcohol duty and extended a 5p cut in fuel duty.
However, local entrepreneurs questioned how much the statement would make life easier for small businesses.
They gathered to watch the announcement at an event hosted by the East Midlands Chamber at RSM UK Management’s Nottingham offices at Tollhouse Hill.
Tanya Cornford, the owner of water cooler company Water at Work, described the Budget as a “missed opportunity”.
“It’s disappointing. We are heading into recession and there was nothing in there for SMEs (Small and Medium-sized Enterprises),” she said.
“We are being squeezed every way with costs and wages going up, but nothing put back in by the government.
“A new van in 2020 cost £330 a month – that’s now £680. If the government isn’t careful, many small businesses won’t be around in five or ten years.”
She added that a National Insurance cut “didn’t work” when it was previously unveiled in the Autumn Statement and was a “sweetener” for the coming General Election.
Craig Brothers, owner of design agency Affari and Six Degrees Associates and a Chamber of Commerce board member, agreed the Budget was “underwhelming”.
“We anticipated the National Insurance cut, but there is nothing else of great excitement,” he said.
“The cut will benefit staff members though. A big problem we have in the local economy is filling roles, and there was also quite a bit to help with that through childcare support.
“We are coming into spring and there are sprouts of good feeling, but we need more support.”
Corrina Hemburg, Managing Director at Access Training, said: “The Chancellor talks about a high wage, high skill economy, so I was disappointed not to hear any support for training.”
Some viewed the lack of surprises as a sign that a General Election could be on the horizon.
Ross Ryan, Business Development Managing at Manufacturing Technology Centre, described the announcements as a “budget for stability.”
“There were no great surprises that would upset the market, and will encourage investing for the long-term.”
Director of Policy and Insight at East Midlands Chamber Chris Hobson, said:
“Anything that can help small and medium enterprises is always welcome to see in the Budget and an increase in VAT threshold should ease some pressure. Investment announced for the High Peak and Erewash area was good to see, too, while the High Income Child Benefit Charge set to become household-based feels fairer.
“On the flip side nothing was really said about skills, sustainability, or any credible strategy for growth; things that could have real benefit to businesses in this area. This was largely echoed in a Round Table discussion of East Midlands business leaders we held where the overall vibe was very much that this was a mostly timid ‘keep the ship steady’ kind of Budget.
“Real tangible investment is long overdue in the East Midlands in areas like infrastructure and skills. We look forward to taking our Manifesto for Growth 2024 to Westminster on Monday 11th March which clearly presents the asks that businesses need.”
On the impact of public spending cuts:
Anja Beriro, Partner in Browne Jacobson’s Government and Infrastructure team, said: “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.”
On net zero rhetoric and nuclear energy:
Ben Standing, Partner specialising in planning and environmental law at Browne Jacobson, said: “The Budget was notable for the lack of focus in how Britain transitions towards a net zero economy compared to recent years and this perhaps sets the tone for a General Election in which green issues move further down the agenda.
“However, there was no rowing back on previous net zero pledges and the Government remains committed to phasing out natural gas from our energy mix.
“There has been a lot of discussion about whether it will be renewables, such as solar and wind, or nuclear which dominates the future grid and the Chancellor made it very clear the focus will be on nuclear, with a particular prioritisation of small modular reactors (SMRs).
“Yet there still needs to be a discussion about where SMRs will be located and, for the communities based nearby, whether they will be acceptable alternatives to renewable infrastructure, which has sometimes received local challenges.
“Moreover, it’s our experience that those against nuclear energy are very active and organised in their opposition to its deployment and any planning applications could get bogged down in legal challenges for many years.
“It’s therefore vital the Government swiftly follows its SMR competition with a detailed plan for how it will successfully introduce this new technology to our grid.”
