Business groups covering Bristol and the West of England this afternoon largely approved of many of the measures in Chancellor Kwasi Kwarteng’s mini-Budget – but the political reaction was less favourable.
Business West, the region’s largest business group and the organisation behind Bristol Chamber of Commerce, said the announcements would go some way to easing the plight of firms facing soaring energy bills and the highest inflation for decades.
Director of policy Matt Griffith, pictured, said: “For companies making profits the cancellation of the planned Corporation Tax rise due in April 2023 will be welcome, and all businesses investing in new plant and machinery will get the continued benefit of the annual investment allowance which had been due to fall.
“The biggest measure for local employers is the long-trailed cancellation of the National Insurance increases, which the new Chancellor announced would be effective from 6 November.
“This cut partially offsets the backdrop of higher costs of doing business. The cost of the package overall hasn’t been published but will add significantly to the government borrowing totals.”
He also welcomed the announcement of new investment zones in the West of England, which could attract jobs and growth into the region.
However, while Labour West of England Metro Mayor Dan Norris cautiously welcomed the investment zone idea, he said while people across the West of England were facing the biggest cost-of-living crisis in decades under the Tories the economy was forecast to have the lowest growth of any major economy next year “bar Vladimir Putin’s Russia”.
He added: “Today was a chance for the Chancellor to get the economy firing on all cylinders and ease the cost pressures local people are facing. Instead, they chose to scrap the cap on bankers’ bonuses when millions can’t afford the basics. There are corks popping in the City but working people can’t afford to turn the heating on.”
Regional accountancy firm Milsted Langdon, which has an office in Bristol, said many businesses would be pleased with the Chancellor’s support during the cost-of-living crisis.
However, it said wider concerns persisted about the potential for rocketing inflation which could harm economic growth and heavily indebted businesses.
Tax partner Rob Chedzoy, pictured, said: “The measures announced by the Chancellor represent one of the biggest tax cuts in 50 years, with estimates suggesting that £45bn worth of tax reductions will be on offer to SMEs and their owners, as well as many other taxpayers.
“The scrapping of the Corporation Tax increase, a permanent boost to the Annual Investment Allowance and support with rising costs through a reverse to the National Insurance rise will, the Chancellor hopes, boost the UK’s economic growth rate by 2.5% and increase spending and tax receipts.”
Accountancy group KPMG’s South West tax partner David Harris said Mr Kwarteng had delivered a fiscal statement flavoured with a return to the economics of the 1980s aimed at driving economic growth and productivity while tackling a wide range of fiscal, social and economic challenges head on.
“Businesses saw a fiscal statement that felt very different and a clear shift in government policy. Gone is Sunak’s higher tax approach focused on balancing the books and instead we have a range of measures to try and halt the UK’s languishing growth figures and super-charge its economy,” he said.
“The planned rise in Corporation Tax rate has been scrapped in a move that will be welcomed by most businesses and hails a return to low-tax, broad-base approach of George Osborne.
“The scrapping of the IR35 rules on off payroll working will also be welcomed by easing a significant compliance burden.”
He said it appeared that ‘levelling up’ would now have more of a tax focus, with the announcement of new investment zones which offer a range of tax benefits that “look very like a throwback to the enterprise zones of the 2010s”.
