South Yorkshire Chamber leaders discuss impact of new budget on businesses

The mini-budget, which the government are calling the Growth Plan, laid out significant changes in taxation; a one percent cut in basic income tax, the removal of the top tax bracket altogether, cuts to stamp duty and the lifting of the cap on bankers bonuses.

Already existing tax rises are also being reversed, including national insurance, alcohol duty and corporation tax.

The CEOs for the Chambers of Commerce in Barnsley and Rotherham, Doncaster and Sheffield called the reforms an “important first step” for growth of businesses in a joint statement.

However, they also questioned some of the risks, including the weakening of the pound and the scale of borrowing that will be needed for such cuts.

Since the announcement, the value of the pound has dropped to the lowest it has ever been for 37 years.

They released the following statement yesterday:

“South Yorkshire businesses share the ambition of the Chancellor to raise the UK’s economic game. At a time when so many face rising energy costs and workforce shortages, bold reforms to remove barriers to investment are an economic necessity. The wealth to fund better public services must be generated by businesses. Today was an important first step towards a more comprehensive strategy for growth.

“The most important measure was the confirmation of the energy support package for business. As in the pandemic, it’s right to start out with a broad-based, time-limited package with maximum reach. If the circumstances demand it, this can and should be evolved down the line into more focused, longer-term support, such as for the many energy-intensive businesses based here.”

And went on to say: “Reversing the increase in National Insurance shows the government has listened to the Chamber Network and we welcome the boost it will give to business cashflow as firms struggle with rising costs. Scrapping the planned rise in Corporation Tax was also important. Had it gone ahead, South Yorkshire firms would have faced a tax rate higher than the EU and global averages, and the new rate for the US. Keeping it internationally competitive is crucial for inward investment to our region.

“Ultimately, nothing matters so much to economic growth as the economic backdrop to business decisions. Businesses may welcome individual measures announced today but many will have concerns about the scale of the borrowing needed to finance them. There are risks to inflation from a weaker Pound, and to the cost of capital from rising interest rates. The Government must stand ready to respond to these with more support for business if economic circumstances become more challenging.”

Chancellor of the Exchequer Kwasi Kwarteng, who announced the changes, has been in the cabinet for just over two weeks after being appointed by new Prime Minister Liz Truss.

He said that the changes will bring about a “new era for Britain”.

In these confusing and worrying times, local journalism is more vital than ever. Thanks to everyone who helps us ask the questions that matter by taking out a subscription or buying a paper. We stand together. Dominic Brown, editor.