Autumn Statement 2023: regional business reaction

The 2023 Autumn Statement (Credit: Kirsty O'Connor / HM Treasury)

Business owners across the West Midlands have been speaking to about Chancellor Jeremy Hunt’s Autumn Statement.

The West Midlands Gigafactory joint venture welcomed the Chancellor’s announcement that the site will be included in the West Midlands Investment Zone during today’s Autumn Statement.

Cllr Jim O’Boyle, Cabinet Member for Jobs, Regeneration and Climate Change at Coventry City Council said, “The West Midlands Gigafactory joint venture welcomes the Chancellor’s announcement that the site will be part of the West Midlands Investment Zone earlier today. Our site is a prime location offering future investors an all-in-one solution for battery manufacturing, research, industrialisation and recycling.
Today’s announcement delivers significant additional tax incentives and breaks, making the site even more attractive for future investors.

“The West Midlands Gigafactory, the UK centre of electrification in Coventry, is the only available site in the UK with planning permission in place for a large-scale battery production facility with capacity for up to 60GWh per annum – enough to power 600,000 electric vehicles. It is perfectly placed as a pioneering centre of excellence for battery technology and manufacturing, located at the heart of the UK’s manufacturing industry.

“The ground-breaking location is the first of its kind in the UK, offering an all-in-one solution for battery research, industrialisation, manufacturing, testing, recycling and electrified logistics, designed to foster the UK’s growing battery ecosystem.”

Tony Hague, CEO of PP Control & Automation said: “I’ve been relentless for many years about the need for the UK to invest in more automation and technology and the ‘full expensing’ announcement today could well be a significant driver in ‘tipping the balance’.

“It should promote much needed investment to drive productivity and increase efficiencies, offsetting rising input costs around materials, energy, transport, and labour. Like all announcements, there is a ‘but’. If the Government changes in the next election, will this important business decision be reversed by new Ministers keen to make their own mark on proceedings? This is what really worries me with no coherent industrial strategy in place.

“For UK manufacturing to thrive, we need long-term thinking and a stable/tax efficient environment. Getting people back to work is key, which is why I am all for the £50m apprenticeship boost (devil will be in the detail) and the £2.6bn funding to help the long-term unemployed and those suffering with sickness and illness.

“Hunt suggested this could deliver 200,000 people back into the workplace. That seems a huge number but would certainly be welcomed by employers fishing in a shrinking recruitment pool.

“In summary, the Autumn Statement was a huge improvement on the last mini budget – at least I never thought ‘oh my god, it’s like a Liz Truss moment.”

Greater Birmingham Chamber of Commerce CEO Henrietta Brealey said: “Despite many of the measures heavily trailed in advance, there were a number of announcements in today’s Autumn Statement which will land well with the business community as we emerge from a turbulent period in our recent history.

“It was pleasing to see the Chancellor back a number of our calls in a bid to drive investment and reduce cost pressures – namely the move towards full expensing, restructuring of pension funds, reforming the R&D tax reliefs system and extending business rate relief for hospitality and retail firms.

“It was also reassuring to see the Chancellor commit to plans to simplify the planning process in order to speed up the delivery of infrastructure projects.

“Given the current labour market pressures, additional funding for Apprenticeships is also welcome, however, offering businesses more flexibility on how they spend their levy funding would have made the measure even more effective.

“In particular, the confirmation of the West Midlands Investment Zone is a major boost for the region, creating thousands of jobs for local people and offers a vital opportunity to leverage private sector investment.”

James Dickens, Managing Director of Birmingham-based housebuilder Wavensmere Homes, said: “Despite government debt continuing to rise, the Chancellor’s Autumn Statement signalled a change in direction, but there was too much flirting around the edges. We were hopeful of a reduction in Corporation Tax and are disappointed this hasn’t been implemented today.

“As a Birmingham-based housebuilder, we also welcome the Investment Zone announcements for the West and East Midlands, which is where the majority of our live schemes are located. We look forward to seeing how the “mini Canary Wharfs” are to be delivered.

“Meanwhile, with mandatory housing targets in disarray, there is a significant reduction in the number of attainable homes coming onto the market. It was encouraging to hear the Chancellor commit to reform the planning system from next year to deliver faster ‘guaranteed’ timescales in return for higher application fees, which Wavensmere Homes and the industry at large supports.

“Despite the high interest rates, the chronic lack of new homes means it is no surprise that the prediction of a 10% fall in 2023 house prices is likely to level out at around 3%. Irrespective of the issues with mortgage affordability, house prices are already showing signs of increasing.

“It was disheartening to see the current Stamp Duty thresholds unchanged, as the only real help first time buyers currently have is the Stamp Duty exemption for homes valued up to £425,000. First time buyers deserve far more assistance that this to access the housing ladder.

“With less homes being built, there has been a marked impact on the rental market. For every home available to rent, there can be as many as seven people vying to occupy it. It is no surprise we have therefore seen rent hikes of 24% at our Belgrave Village scheme in central Birmingham, and similar increases of 22% at Nightingale Quarter in Derby city centre.

“Due to the difficulties vying first time buyers are encountering to obtain a mortgage, the sales rates of the PLC housebuilders – who have largely depended on them – have suffered. To counter this, there have been a number of sizeable deals into the Build To Rent sector. With the Renters Reform Bill seeing some private landlords sell up, I fear hardworking people could see pricy build to rent blocks as their only option. The current market conditions could result in three to four national landlords become an overly dominant oligopoly and able to collude to overinflate rents.

“We are frustrated with the lack of bold action from the Chancellor today and hope for a more confident Spring Budget”.

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