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East Midlands Chamber News

Budget 2021: East Midlands Chamber welcomes ‘shot-in-the-arm’ budget for businesses

Commenting on Wednesday’s (3 March) Budget announcement, East Midlands Chamber (Derbyshire, Nottinghamshire, Leicestershire) chief executive Scott Knowles said: “Many firms will welcome a business-friendly budget that not only supports them through what is hopefully the final throes of this pandemic, but also provides a shot in the arm to help them grow, invest and innovate during the post-Covid economic recovery.

“Policies such as the Restart grants and extensions to furlough, the business rates holiday, and VAT cut for hospitality and leisure – as well as the way in which they will be phased out – will remove the cliff-edge many companies had been facing and help them get over the hump of reopening as lockdown is phased out.

“For smaller outfits in hard-hit industries such as hospitality that may have been wondering whether it would even be worth reopening, such measures will hopefully provide the confidence to persevere in the coming months. However, there’s a risk this will come too late for some businesses, with a large number having already folded, so we need to ensure financial interventions reach these companies as quickly as possible.

“We know there’s been many self-employed people who have been left out of previous support packages, so extending schemes to include another 600,000 people will be a great relief for those who have been hit harder than others over the past year – although there will still be a significant support gap that needs to be addressed.

Investment in innovation suggest a budget for growth

“Other policies make this feel like a budget for growth. So-called ‘super deductions’, for example, are a particularly bold tax incentive that will give the most ambitious businesses the appetite to invest in new equipment and technology. We’ve seen some great examples of innovation in the East Midlands during the pandemic and this will help even more companies to look for new opportunities.

“This will also support the UK’s ambition to be a scientific superpower. Our country has proven its credentials over the past year with the development of the vaccine, treatments and rapid testing kits, including in our region where we have some amazing companies in healthcare, pharmaceuticals and MedTech.

“Productivity isn’t just about equipment, but it’s also about people. Therefore, it was also great to see a new Help to Grow scheme aimed at ushering in a new generation of highly skilled managers, who will be critical to training people in entry-level roles and developing the strategic thinking that will ultimately drive growth in businesses.

“We also welcome a renewed focus on apprenticeships for people aged over 25 who have also unfortunately lost their job during the pandemic – it’s so important that we make a step change in the way these roles are understood as being essential to the country’s long-term economic success.

“Lots of businesses have embraced digital technologies and the Help to Grow Digital scheme will help them to continue taking advantage of these trends in order to address the UK’s long-standing productivity problem.

“Green growth should be at the foundation of our post-Covid economic recovery so it was also refreshing to see more emphasis placed on technologies and geographical hubs, while the game-changing East Midlands Airport freeport status will have a focus on low-carbon making and movement of goods.

Levelling up remains high on the agenda

“It’s encouraging to see that ‘levelling up’ remains high on the Government agenda despite a tough 12 months for the economy, and the new national infrastructure bank and Towns Fund – which includes areas in our regions such as Clays Cross, Mansfield and Newark – signals positive intentions.

“However, it’s important the Government doesn’t just believe it can achieve true levelling up by relocating some departments to towns and cities in the regions, and instead throws its weight fully behind strong infrastructure schemes like HS2 – with a decision still due on the future of the Eastern Leg.

“The obvious downside for businesses is the rise in corporation tax to 25%, but the fact this won’t come into effect until April 2023 means this shouldn’t damage the economic recovery.

“Businesses we have spoken to so far recognise the need to begin paying back the money received through grants and furlough over the past year. They are pleased at the well-thought-out manner of its introduction as it will have a less severe impact on the smallest firms and those that have been disproportionately affected by lockdowns due to the tapered duties according to profit margins.

“It’s important to note though that while this appears on the face of it to be an optimistic budget that is friendly to growth ambitions, announcements of this type only become meaningful once the money starts flowing through – so clearly we will be watching closely to see the Chancellor’s promises delivered over the coming year.”