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East Midlands Chamber News

Autumn Budget must not deter business investment with economic recovery ‘in the balance’, says East Midlands Chamber

Commenting ahead of tomorrow’s Autumn Budget announcement, East Midlands Chamber (Derbyshire, Nottinghamshire, Leicestershire) chief executive Scott Knowles said: “The Autumn Budget comes at a very delicate time when the economic recovery is in the balance and we would urge the Chancellor to be mindful of the damage the Government could cause by adding further costs to doing business, rather than encouraging them to invest in growth.

“Our Quarterly Economic Survey for Q3 2021 shows that although there were improvements across many  indicators such as sales, cashflow, employment, confidence and investment intentions, key issues remain – not least with price pressures and access to required skills to fill job vacancies.

“We recognise there are a range of factors at play in terms of where the economy is currently at and it’s difficult to unpick short-term, temporary impacts from the longer-term, structural issues. For the vast majority of firms, we can’t introduce any new up-front taxes on top of the national insurance increase previously announced and expected increase to the national minimum wage.

“Our latest data suggests that growth in investment is slowing and not as high as we’d expect it to be at this point of the recovery. The Government needs to further incentivise companies through enhanced investment allowances, while discounting capital investments from business rate levels – particularly if these are to support efficiencies and the sustainability agenda.

“Extending the Recovery Loan Scheme from December until the end of June will provide some support, but we would also ask for VAT to continue at a reduced 12.5% rate for hospitality and leisure businesses for an extended period beyond April, when it is due to end.

Business rate reform and transport investment needed

“We welcome the Chancellor’s comments over the weekend that we’ll learn more about plans to reform business rates and would expect to see a timeframe to deliver these changes as quickly as possible, given the importance this could have to town and city centres that have been hit hard during the pandemic.

“Some transport investment has already been announced in recent days and we are concerned at how the East Midlands – which already receives the lowest transport spend per head nationally – could once again miss out. Of course, HS2 is the headline in this regard but there are other big ticket items affecting our region’s road and rail infrastructure that will drive economic growth if they receive Government backing.

“Our region is mindful of the constant rhetoric about levelling up that comes out of the Prime Minister’s statements, and we will be keeping a careful eye on announcements around the Budget to determine whether this means anything tangible to the East Midlands.”