Chamber: Tough Budget for businesses bracing for higher costs

Following an Autumn Budget that saw employer National Insurance contributions rise to 15% from next April, the threshold for payment fall from £9, 100 to £5, 000 and National Minimum Wage increases, East Midlands Chamber has given its reaction.

Director of Policy and Insight Richard Blackmore said: “This was a tough budget for business where the rise in employer National Insurance contributions will add significant pressure at the worst possible time.  This falls right on top of a ton of challenges firms have been facing - the cost of doing business crisis, high utility costs, pressure to raise prices while remaining competitive and the difficulties in recruiting staff with skills that match their needs.  With headwinds already hampering businesses, to now have to foot additional staffing cost could lead to cautious spending.

“There was also no detail regarding business rate or planning reforms – two fundamental systems to economic growth that have been promised, during General Election manifestos, to be finally addressed.

“Our latest Quarterly Economic Survey showed reduced investment among East Midlands businesses on both training, which was down by 5%, and machinery spend, which dropped by 13%, so it’s possible this Budget could take us further down the road of resisting investment.

“While it was encouraging to hear talk of a freeze on fuel duty and some investment into further education, there are too many critical areas we heard nothing about - electrification of the Midland Main Line never came up (again), while everywhere around the East Midlands will get electrification. We need full electrification, not a half or quarter measure that covers only a fraction of the region.

“Infrastructure is far below where it needs to be in the East Midlands.  The Chancellor spoke of improved rail links in other parts of the country, but we have a redundant line between Leicester and Coventry – two major cities that were once directly linked - and a painfully slow line linking Nottingham with Lincoln.

“There was a lack of clarity on business support and skills in this Budget.  We need the government to outline specific plans on investment into skills, into Green Growth, infrastructure and transport, along with a strong trade strategy to enable the East Midlands to thrive.

“Businesses now have some serious planning to do regarding their future investment intentions and their people plans, following today’s Budget announcements.  We will be addressing what this means in practical terms for our members in the next few days and bringing the anticipated economic impact by sector and geography to local, regional and national political leaders.”