Budget Reaction
Commenting on the Chancellor of the Exchequer’s Autumn Budget statement, Christian Spence, head of research and policy at Greater Manchester Chamber of Commerce, said:
“The Chancellor had a difficult job in balancing competing expectations of both fiscal prudence and economic reform, with these having to be delivered against markedly lower growth forecasts for the UK economy, weak productivity and the challenges both abroad of Brexit and at home with housing, benefit reform and stagnant wages. There are a number of positive measures brought forward, particularly around housing and stamp duty, universal credit and investment. However, perhaps the key point from this budget is that the long-term growth rate of the UK economy looks now to be only around 1.5% with continued weak productivity, and it is through this lens that all other policies should be viewed: do not understand the challenges that this will bring.
“Greater Manchester was mentioned numerous times, with confirmation of £243m from a Transforming Cities Fund for local transport, support to develop a local industrial strategy and on land value capture, as well as investment for homelessness initiatives. Measures around support for the housing market are welcome, but the review into land banking must be handled with caution as this could be riddled with unexpected consequences. Further investment for construction skills is vital, and we welcome other initiatives to support schools and colleges advance learning for their students, particularly in mathematics. These measures, alongside a greater focus on R&D and investment are positive ways that the UK economy can attempt to close its productivity gap with its competitor economies.
“But for businesses, the biggest positive message is in business rates reform, for which we have long argued. The indexation to CPI instead of RPI will save Greater Manchester businesses around £10m per year, though we must now also consider the effects that this may have on our local authorities at a time of 100% retention of revenues. Revaluations moving to every three years instead of five will help to smooth the gaps, but it must be matched with a reduction of administrative burden and a simplification of the system overall. We maintain our call that business rates in the UK remain unfit for a 21st century economy in its current form, and will maintain pressure on government to commit to a wholesale review of the system.
“Overall, the Chancellor has managed to deliver a better Budget than many commentators were expecting. The challenges facing the UK overall and its businesses are large; this Budget will have helped for some of those, but there remains much to be done to prepare the UK for its future outside of the EU.”