Budget 2014: West Midlands business delivers its verdict

BUSINESS leaders in the West Midlands have delivered their verdict on the Chancellor’s latest Budget, describing it as a “mixed bag” with some helpful measures and disappointing omissions.

Greater Birmingham Chambers of Commerce welcomed moves to help exporters with the doubling of finance available to £3bn, reforms to air passenger duty and a commitment to house building.

However, it said there was a lack of focus by George Osborne on capital spending, infrastructure investment, devolution and a business rates revaluation.

TheBusinessDesk.com’s Budget coverage is brought to you in conjunction with EY. To read more click here.  

GBCC president Tim Pile said: “We hugely welcome the measures to double export finance and this will assist West Midlands exporters to further increase their global sales. This region is already a success story and as a nation we need to capitalise on this. Expanding export finance will help those firms nervous about receiving payment from foreign clients.

“UKTI and the chamber work closely with businesses across the region to encourage them to export and we are glad the Chancellor recognises that this will help an export-led recovery.

“However, the Budget did not address the role of devolution. We will remind the Chancellor of one of our key policy campaigns to see an expansion to the Single Local Growth Fund to £5bn and to ensure that local authorities, LEPs and chambers had an effective voice in prioritising key local infrastructure projects.”

Richard Halstead, Midlands Region Director at EEF, the manufacturers’ organisation, said the region’s manufacturers had cause to be delighted by what had been announced.

“The Chancellor said this would be a Budget for manufacturing and he has more than delivered on his word. The Government has sent a strong message that it clearly recognises the need to make the competitiveness of the UK a priority and this will benefit hard-working companies across the region as well as up and down the country,” he said.
 
The EEF had urged Osborne to reduce the rising cost of energy and was pleased by his reaction.

“Taken together with measures to boost investment, exports and skills, the Chancellor deserves a pat on the back. We have always said that to achieve a resilient recovery the Government must back manufacturing and we’ve seen that from this Budget.
 
“We now have some of the building blocks in place which will help rebalance the economy. But, as the Chancellor suggests, there’s still more work to be done. We now need to take steps which will lead to longer-term solutions beyond current spending and electoral cycles. This will finally give business the predictability and certainty to encourage the successive rounds of investment our economy needs.”
 
Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, said: “An increase to the Government-backed export finance available to £3bn is very much welcome.”

Judy Groves, of the Rigby Group, hoped to see further detail on increased infrastructure investment.

She said: “It is a sentiment we all welcome but there wasn’t a whiff of detail on subsidies or cash help – and that is what will make that happen. Hopefully that will emerge in the detail that comes out after the Budget.”

Doug Squires, a former president of the chamber and director of Squires Engineering and Gear, welcomed the support for manufacturing.

He said: “I was very encouraged by the changes to energy bills for manufacturers. That will affect us directly and, also, it should cut the cost of producing steel and, hopefully, that will be passed on to companies like ours too.

“It helps to keep us competitive and, all of that, along with the additional support for exporting should help with all of our overseas efforts.”

Jane Gratton, deputy chief executive of Staffordshire Chambers of Commerce, said: “The chamber called on the Chancellor to reduce business costs, support business investment and encourage the employment of young people and he seems to have listened to us.   A number of positive changes were announced that will offer help to our manufacturing and exporting companies.”
 
The increase and extension of the Annual Investment Allowance, and the increase in R&D tax credits, would be warmly welcomed by business, she added.

“It is vital that firms are able to invest if they are to compete, grow and create jobs,” she said.

In the Black Country, chamber chairman Mike Dell said businesses had been looking for radical reform to help the area enjoy the economic growth it deserved.

“But we are disappointed in the lack of commitment. We welcome the measures to support exports, but without a commensurate incentive to train and develop skills, many businesses will not be able to take up new opportunities to grow,” he said.

“The growth in apprenticeships and small business support is also welcomed but for too many small businesses a lack of flexibility in training provision and a lack of employability skills in young people means that for them, apprenticeships will not work. Localised trailblazers are therefore needed.”

Adrian Hanrahan, managing director of Robinson Brothers pointed out that the reduction in energy costs would certainly benefit his company but questioned the difference between a regular apprentice and a higher level apprentice when many of its own apprentices were being trained to HND level.  

Elsewhere, Lord Kumar Bhattacharyya, head of manufacturing group WMG, part of Warwick University, said there was “a bit for everyone” in the Budget but the UK still faced a massive deficit despite promises to bring it down faster.
 
Lord Bhattacharyya welcomed the increase in the annual investment allowance to £500,000, but questioned how many would pick up on it.
 
“Companies have to invest to take advantage. Most don’t use it. There is tremendous short-termism in this country,” he said.
 
Liz Peace, Chief Executive, British Property Federation, said: “Many in the development industry felt that the long term aim of Enterprise Zones to attract investment and jobs was being hindered by short-term nature of the financial incentives on offer and that the Government simply had an unrealistic view of the time it takes to get regeneration projects underway.”

She said the Chancellor’s decision to extend business rate discounts and enhanced capital allowances in EZs for a further three years was therefore, very welcome.

“It will mean that any company setting up in an EZ before 2018 will now benefit from the rating discount. However, the BPF believes that Government is likely to have to come up with more substantial incentives if growth is to take off in the more challenging EZs where demand remains very subdued,” she said.

Ian O’Donnell, Warwickshire & Coventry Chairman, Federation of Small Businesses, said: “This was always going to be a ‘steady-as-you-go’ Budget for business, designed to get the UK’s financial affairs in order.

“The Chancellor delivered a Budget to maintain positive momentum in the economy, while incorporating fiscal prudence. (It) offered a clear signal for businesses to grow through the increased investment allowance, and with a focus on manufacturing,” he said.

“That said all small businesses need to be bold and brave in 2014. Following the fall in unemployment, we know more than half of our members have aspirations to grow with many wanting to recruit and pay more too. The Chancellor set the pace towards some progress but there is still more to be done to get the economy and public finances back on track.”