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Gloucestershire Business News

Spending Review: How did business react?

Chancellor Rishi Sunak's Spending Review has been labelled a "missed opportunity" amid calls for urgent action to limit the stark forecasts for the economy.

The Chancellor spelled out sobering predictions from the Office for Budget Responsibility with borrowing this year expected to reach £394billion with the economy expected to contract by 11.3 per cent. collated business reaction to Mr Sunak's announcements.

Claire Ralph, policy manager, Business West

"The public finance position made for stark reading and confirmed the degree of economic shock our region has experienced due to Covid-19.

"Business West is disappointed with the Government's lack of capital investment.

"Some minor funding has been allocated to the West of England Combined Authority for local transport improvements through the Transforming Cities Fund.

"Elsewhere it was thin pickings - with our regional leaders having to bid against other English regions for a share of the new £4billion Levelling Up Fund for local infrastructure projects to support our area's economic recovery. We hope this doesn't all head North.

"Extensions to grant support for businesses whose premises remain closed under high level tiers was absent despite the end of the national lockdown next week.

"Given Brexit is just six weeks away it was surprising the Chancellor made no mention of this - despite the subdued growth figures assuming an EU trade deal.

"The Government's plan for paying for the crisis will emerge in the Spring but at the moment he is keeping businesses very much in the dark."

Mike Cherry, national chairman, Federation of Small Businesses

"A Government which claims to be pro-enterprise had very little to say about the importance of business and private sector job creation.

"This Spending Review was a missed opportunity to help small business owners - not least those who have been excluded from support measures.

"It brings the need for a pro-business Spring Budget into focus. Rather than being a tax-raising Budget, it must have growth and recovery at its heart.

"Depending on the spread of Covid and restrictions over the coming months, very significant interventions may well be needed far sooner than the spring.

"Commitments to a new UK infrastructure Bank, Levelling Up Fund and UK Shared Prosperity Fund are good to see.

"It's vital that - as these new initiatives are rolled out - small firms are brought into the supply chains of capital expenditure projects and paid on time.

"We've heard an awful lot about government debt. We should also remember that previously thriving small firms have had to take on significant borrowing to keep the show on the road and pay for safety measures.

"Come the spring, when repayments start to fall due, many will be extremely stretched. A pro-business Budget at that juncture will not just be important, but essential."

Rain Newton-Smith, chief economist, CBI

"Stark forecasts point to tough times ahead. But through his statement, the Chancellor has made some bold autumn decisions to power a spring recovery.

"The Spending Review lays the foundations for a brighter economic future. A new National Infrastructure Bank, a multi-year settlement on R&D, and a comprehensive plan for creating jobs and renewing skills are just some of the building blocks needed to deliver on this vision.

"But ambition must be matched by action on the ground. The Government's commitment to build, build, build must be delivered.

Helen Dickinson, chief executive, British Retail Consortium

"We are encouraged the Government is considering options for further rates relief for businesses in England affected by Covid.

"A return to full business rates liability in April would be impossible for some firms to meet and freezing the multiplier in 2021/22 does not solve this problem.

"Government should adopt our proposal for business rates relief at 50 per cent which reflects the fall in retail property values and brings market reality into the system, while generating much needed revenue for the Treasury.

"We support the Government decision to adopt the Low Pay Commission's recommendations for a moderate increase to the New Living Wage.

"We heard with interest what the Chancellor had to say about a Levelling Up Fund to support local areas. We hope the fund can be used to provide much-needed investment in town and city centres, supporting local communities and businesses around the country."

Kate Nicholls, chief executive, UKHospitality

"Hospitality jobs are at the core of the grave unemployment forecasts the Chancellor announce, yet the sector has shown repeatedly, most recently in August, how those jobs can help deliver economic growth for the economy.

"The increase to the National Minimum Wage will be a great benefit to many workers in our sector only if the businesses that employ them are still around.

"We can only deliver the growth the Treasury desperately needs if we survive the winter. If hospitality does not get the support it needs right now, businesses will fold and jobs will be lost.

"That is not just a disaster in the short term, it undermines the efforts to recover next year and into 2022. We have already lost 600,000 jobs.

"A swift announcement to fill the gap in hospitality previously filled by the Job Retention Bonus, coupled with a solution on rents, is critical for immediate survival. Subsequent revival will be hugely benefited by then extending the VAT cut and the business rates holiday.

"Every venue that we can save now means jobs safe and secure as we look to rebuild."

Emma McClarkin, chief executive, British Beer & Pub Association

"The lack of action by the Chancellor to save pubs and jobs by giving them the proper support they need is staggering. It seems pubs have now been cast adrift by the Government. 

"To save businesses and jobs the Chancellor needs to come back to the House this week and set out an enhanced package of support ahead of the new tier system coming into effect.

"Not only is the Government unfairly rendering pubs unviable or forcing many of them to stay closed this Christmas, it isn't even giving them the full financial support they need to survive. Whilst the news of a review of business rates reliefs in the New Year is a glimmer of positive news, it is not nearly enough.

"It's all well and good investing in new jobs, but the actions of this Government are killing viable pub businesses and thousands of jobs that already exist. Yet the Government is not doing enough right now to help them survive nor Britain's brewers that are reliant on them.

"If our sector isn't allowed to trade properly, or at all, how on earth can the Chancellor expect it to survive and protect the livelihoods of the thousands of people working in it? Adequate grants need to be given to pubs urgently or they simply won't survive the new tier restrictions or Christmas.

"The Government must do more to help our pubs, the livelihoods they support and the communities they serve across the UK. If not, this really could be the end of the pub in Britain as we know it."

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