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East Midlands Chamber News

Budget 2021: Don’t let businesses fall at the final hurdle, says East Midlands Chamber

Speaking ahead of Wednesday’s (3 March) Budget announcement, East Midlands Chamber (Derbyshire, Nottinghamshire, Leicestershire) chief executive Scott Knowles said: “This Budget comes at a time when businesses are still in need of significant support, even as the country’s economic environment is set to change during the gradual exit from lockdown over the coming months.

“The two most important principles to businesses are that the Chancellor is prepared to offer the protection needed to get through the final throes of lockdown, while helping them to drive the growth that will ultimately steer the economic recovery.

“While we can now see light at the end of this long, dark tunnel, it’s absolutely vital for firms in sectors that have been worst affected during lockdown – including hospitality, retail, tourism and aviation – to be supported financially because after helping them get this far, it would be illogical to let them fall at what might be the final hurdle.

Additional business grants welcomed

“To this end, we welcome the Chancellor’s commitment to additional grant funding of up to £18,000 each for businesses hardest hit by the lockdown. The costs associated with getting a business up and running again can’t be underestimated and this funding will help smooth the transition in reopening for many firms.

“However, broader support is also required over a phased period for these companies. This means extensions to the Job Retention Scheme, business rates holiday and VAT reductions until the end of Q2 at the earliest to act as a cushion while businesses gradually welcome back customers and return to a sense of normality.

Business rates review is needed to make taxation fairer to firms

“Of course, the pandemic has been hugely costly to the public purse. However, we’d urge him not to hike any taxes that would stifle business growth or deepen the disproportionate impact between sectors.

“Therefore, rather than widespread increases to corporation tax, for example, we’d prefer to see a commitment to reviewing the business rates system as soon as possible so we can finally see a level playing field between the high street and online retailers.

“The bricks and mortar tax system doesn’t reflect the way the world works now as the way in which people interact with businesses was already fundamentally changing before the pandemic – and these trends have only been accelerated over the past 12 months.

R&D tax credits will incentivise innovation

“As businesses will be the drivers of growth to turbo-charge the economic recovery, the tax regime must reflect this. We’ve been impressed by the levels of ingenuity and innovation that businesses in the East Midlands have shown during the pandemic, and the Government needs to back those companies with incentives such as R&D tax credits, increasing the annual investment allowance and other ways that may encourage investment in upskilling staff.

“East Midlands businesses have also been embracing the UK’s commitment to ‘build back greener’ so we’re excited to see what incentives and support the Chancellor will offer businesses at the front of the sustainability agenda.

More support needed for young people and unemployed

“As the economy begins its recovery, it’s vital we don’t forget young people and those who have lost their jobs over the past year. To this end, the Government’s Kickstart scheme and Restart project – both aimed at supporting individuals into work – are going to be incredibly important.

“Continued emphasis needs to be placed on these schemes and their deployment must be increasingly rapid in order to avoid leaving large numbers of people behind as the recovery kicks in.”

Freeport opportunity for the East Midlands

”Finally, the Budget is a fantastic opportunity for the Chancellor to make a statement that backs the Government’s belief in a global Britain by revealing where the 10 freeports will be designated.

“We believe the East Midlands has a brilliant offer for a unique inland freeport that will deliver investment and jobs to the region, so a positive announcement would provide a real feelgood boost to businesses here – and help continue the momentum that could bring confidence back as we begin to come out of lockdown.”