Measures to reduce business costs welcome, but questions remain about the overall impact of tax changes on the economy

Responding to the Chancellor’s ‘Mini Budget’, the CEOs of Barnsley & Rotherham, Doncaster and Sheffield Chambers of Commerce said in a joint statement:

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.

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.