Budget 2025: Businesses react to tax and spending plans outlined by Chancellor Rachel Reeves
Business confidence is likely to remain fragile for some time - Black Country Chamber of Commerce has said in the wake of the Chancellor's Autumn Budget.
Senior leaders and business champions across the Black Country have given a mixed reaction to Chancellor Rachel Reeves hugely-anticipated speech in the Commons where she laid out her plans to cut NHS waiting lists, cut the cost of living for working people and reduce debt and borrowing.
Sarah Moorhouse, chief executive of Black Country Chamber of Commerce, which represents more than 750 businesses in Wolverhampton, Walsall, Dudley and Sandwell, said there were a few welcome points but it was “hard to see” how the plans outlined will drive the growth the region needs.
She said businesses had ahead of the Budget stressed confidence must be supported, not undermined, highlighting worries about rising taxation and adopting a wait and see approach to investment - “fearing new measures would erode margins and dampen growth”.
She told the Express & Star: “The Chancellor’s announcements appear to confirm some of those concerns.
“The salary sacrifice scheme changes, for example, will certainly increase costs for employers. By reducing the limit to £2,000 a year before National Insurance becomes payable, the Chancellor is penalising people saving for their future and simultaneously heaping more costs on business.
“The increase in the minimum wage is another added cost to employers at a time when there is little growth in the economy to pay for it.
“The introduction of the Mansion Tax is likely to add to the slowdown in the housing market – adding further pressure on the construction industry which needs such activity if it is to build with confidence.
“And our retail and hospitality sector will undoubtedly be hit by the range of extra taxation and the income tax threshold freeze announced today which ultimately gives people less money in their pocket to spend on the things they want.
“But there was some good news. We welcome the launch of the British Industrial Competitiveness Scheme, which will help cut electricity costs for more than 7,000 manufacturers at a time when soaring energy bills are hampering our ability to trade on the world stage.
“And the freeze on rail fares in England means the cost of business travel will become more manageable over the next 12 months.
“But overall it is hard to see how today’s Budget will drive the growth we all want to see and help restore some of the confidence business needs in the economy if it is to succeed.”
Raj Kandola, acting deputy CEO of Greater Birmingham Chambers of Commerce, said the tax rises and spending plans outlined by the Chancellor “offered little surprise” and the Budget "does not go far enough to give business confidence the boost it needs" but he added: “From a business perspective, there were welcome announcements around offering free apprenticeships to SMEs and a commitment to supporting more people into the world of work.
“It was pleasing to see a commitment to driving further firm-led innovation – namely around supporting scales up listing on the London Stock Exchange, bolstering the remit of the British Business Bank and an extension of the EIS and VCT schemes.
“Consumers will welcome a much-needed cut on energy bills and many manufacturers will benefit from a similar scheme. However, firms operating in hospitality and retail are also crying out for support on this front.
“Regionally, it was pleasing to hear the Government reaffirm commitment to the Midlands Rail Hub, the Creative Place Growth Fund and funding to deliver the West Midlands Growth Plan. However, additional powers for Mayoral authorities to raise tourism taxes will need careful implementation to offset any inflationary impact.
“The plans around supporting the transition to electric vehicle usage remain unclear – with an increase in both taxes and grant funding for different groups.
“Overall, businesses will be breathing a sigh of relief that they weren’t a marked target for tax hikes like last year but a number of measures announced will simply add to the crippling cost pressures that many face on a daily basis.
