North West business leaders have reached to the massive package of tax hikes and spending cuts the Chancellor announced in his Autumn Statement.
Jeremy Hunt vowed to help the country through the economic "storm" and tackle inflation.
For a full breakdown of what Mr Hunt said, click here.
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'It is a very sad state of affairs'
Sacha Lord, Greater Manchester's night time economy adviser, said: "Landlords and restaurant owners will be deeply concerned by today’s Autumn Statement.
"With these announcements, we will inevitably see a notable downturn in consumer spending over the coming weeks and months, at a time when operators need the most support as they recover from the hangover of pandemic-related debt.
"Disposable income underpins our UK economy and I’m hugely concerned that the policies outlined today will create a severe contraction in the sector.
"Spending on luxuries such as dining out is naturally the first to go in times of cutbacks and the hospitality sector is wide open to be the first to suffer.
"Operators are being squeezed beyond their ability, and I fear we will now see huge cuts in staffing, reductions in opening hours and venues closing at a faster rate faster than seen during the pandemic.
"It is a very sad state of affairs and there will be many extremely worried business owners in the UK tonight."
'Tax planning around estates will be even more crucial'
Clive Pointon, head of wills, trusts and tax at Aaron & Partners, said: "Inheritance Tax always attracts attention when it comes to the Chancellor's annual Budget or Statement, but the rumour mill had gone into overdrive with changes inevitable.
"The tax-free threshold of £325,000 will again be frozen, which is effectively another method to help the government balance the books. Inflation takes many more estates over the threshold.
"This allowance of £325,000 was first set in 2009 and has not risen at all since. Rising property prices means that every year more and more bereaved families find themselves needing to make significant Inheritance Tax payments.
"Inheritance Tax applies to the estate, property, money and possessions of someone who dies. With this threshold tax freeze, careful tax planning around estates will be even more crucial to ensure assets are passed on efficiently without a 40% deduction for Inheritance Tax."
'Good to hear that levelling up remains a key priority'
Charlie Ardern, head of Cluttons’ Manchester office, said: "It was good to hear that levelling up remains a key priority together with the commitment to the northern powerhouse and the HS2 to Manchester.
"As the UK's second capital city, having such quick access to and from London is critical infrastructure for the continued growth of the north.
"The impact on the Manchester market since the Government announced it would be moving 2,500 jobs here with a brand new Govt hub built in 2025 was pronounced.
"Such a move provides a huge boost to investment, activity and brings with it yet more jobs - all of which have a knock on effect of positivity on the local market as a whole.
"Going forwards, we need to see and hear more of this - not just in Manchester but across the North and indeed all over the UK."
'This U-turn is about as counterproductive as it gets'
Mark Tighe, CEO of Manchester-headquartered innovation funding specialist Catax, said: "The change announced to SME R&D tax relief lets smaller UK businesses down at a time when they need it most, and it represents a spending cut that is just as harmful as cuts to public services in the long run.
"The revenues generated by businesses claiming R&D tax credits are the same pounds that end up running our hospitals and our schools.
"When you break this kind of spending down, these are risk-taking companies who are attempting to do something genuinely new in a bid to grow their businesses and benefit the economy.
"At a time when companies are still yet to see any kind of dividend from Brexit, greater innovation investment is what the UK needs if GDP is to grow.
"No government in their right mind should be ripping the carpet out from underneath those firms still willing to embark on these kinds of projects in the face of a long recession.
"As late as 2015 HMRC was embarking on publicity campaigns to encourage more SMEs in particular to claim. These same SMEs are now being told they and their R&D doesn't matter when it’s their innovations that can prove just as disruptive as those introduced by larger companies.
"It has taken industry two decades to get SMEs to realise that they’re an important part of the innovation pie.
"This U-turn is about as counterproductive as it gets when other countries are using exactly the same kind of incentives to get ahead and stay there."
'There are signs of optimism'
Alan White, business development director at Manchester-based The Translation People, said: ""After today’s announcements, many businesses will be bracing themselves for an increase in costs.
"We already know that rising business costs are a concern for many UK-based businesses that trade internationally, with over a third (36%) stating it’s one of their biggest barriers to overseas growth.
"Other barriers include supply chain issues (39%) and labour shortages (26%), which can both be further impacted by rising costs.
"Yet despite challenging times and financial pressures, there are signs of optimism. Eighty per cent of businesses that trade overseas plan to grow their global footprint further in the next five years.
"Many have been quick to adapt to different ways of working since the pandemic, using technology to improve efficiencies, expand their teams, reduce costs and improve their sustainability credentials.
"By nature, successful businesses tend to remain agile so they can adapt to external challenges. But what many businesses will now be looking for is reassurance that there is support for growth opportunities so they can continue to attract and retain the best talent, invest into research and development, and further establish the UK’s role as a leading business hub in the global economy."
'Increased wage bills may cause concern for employers'
Alan Price, CEO at BrightHR in Manchester, said: "In today’s Autumn Statement, the Chancellor confirmed the rate of the National Living Wage will increase from £9.50 per hour to £10.42 per hour in April 2023. This 9.7% increase marks the largest ever increase to National Living Wage (NLW) rates. Employers should work with HR and payroll teams to implement the change and communicate it with the wider workforce.
"However, it’s important to remember that the NLW only applies to workers aged 23 and over; the remaining rates in the National Minimum Wage structure are still to be announced.
"Whilst the increase is welcome news for employees, many will still struggle as inflation and the cost-of-living continues to put pressure on household incomes. As such, employers should ensure there is wider support in place to facilitate positive financial wellbeing.
"Similarly, increased wage bills may cause concern for employers who are facing soaring expenses in all parts of their business. This could lead to tough decisions and the need for organisational changes. Where this is this case, employers must make sure they follow fair processes and consult fully with their workforce."
'These changes could potentially see longer-term damage'
Hadyn Rogan, partner and tax law specialist at Weightmans LLP in Liverpool, said: "Following the September ‘mini budget’ it came as no surprise that the Chancellor would need to look to increasing taxes and trimming allowances wherever possible to help provide some stability.
"The cut in tax free dividend allowance from £2,000 to £1,000 was one such example of this. However, this will likely disproportionately impact small businesses and could have a potentially harmful impact on the economy, as the cut in the allowance combined with the earlier corporation tax increase will significantly increase the tax burden on many businesses.
"Although money needs to be recouped, these changes could potentially see longer-term damage with many small businesses unlikely to be able to absorb these additional costs together with rising energy costs through the winter and it is to be hoped that other support – in the form of grants for example - will be provided instead."
'There wasn’t much to cheer about'
Stephen Hogg, head of North West and regional residential UK regions at JLL, said: "I think the North West’s cities will rightly feel nervous about the onset of ‘Austerity 2.0’ in today’s Autumn Statement, given that the scars of the last round have barely been healed by the stop-start nature of the Levelling Up agenda.
"Clearly, given the financial crisis caused by the markets’ fear that the UK had lost its sense of fiscal responsibility, there was a need to restore trust today.
"But with few initiatives to boost growth and a slower rise in capital spending, the North West’s public sector is going to find it much harder to play an active role in local regeneration projects.
"Cuts to budgets force Government departments and local authorities to make really hard decisions that ultimately reduce the people and capacity available to deliver on growth and renewal in our regions.
"There wasn’t much to cheer about in today’s Autumn Statement but a renewed commitment to Northern Powerhouse Rail was something.
"It shows that that despite the need for us all to endure short term pain as the government tries to fix our public finances, it does at least remain committed to projects that boost long-term growth.
"Investment zones may not have delivered what was suggested in the ‘mini-budget’ but they were an idea of some promise and at least worthy of exploration.
"Many will feel disappointed by their scrapping, As we look ahead, we await details for the university-focussed scheme that will replace them and hope it will come to the fore before the next Budget to support local authorities."
'There was little to cheer for businesses and individuals'
Carl Williams, North West managing partner at Grant Thornton UK LLP, said: "With inflation at a 41-year high and casting a dark shadow over the economy, today's Autumn Statement was always going to be focused on trying to fix the state of the nation's finances with a tough package of tax hikes and spending cuts.
"With a £54bn black hole to plug, there was little to cheer for businesses and individuals today, although many of us in the North will be pleased to see the commitment to invest in HS2 rail and the much-needed Northern Powerhouse Rail.
"The acknowledgement that regional devolution is a key lever of growth was welcome too and we look forward to learning more about the new 'trailblazing devolution deal between the Government and the Greater Manchester Combined Authority.
"Levelling-up our economy remains very much a work in progress with many people in our region struggling amid the current cost of living crisis."
'An easy win for government'
Tony Reddin, tax partner at MHA Moore and Smalley, said: "After the events of recent weeks, this was always going to be a statement designed to reassure the markets that the government has a credible plan to achieve fiscal stability and reduce the deficit.
"Today’s announcements were a confirmation that the majority of the working population will be expected to contribute toward those objectives.
"The freezing of tax thresholds until 2028 amid significant wage inflation will allow the government to increase tax receipts without a major change in tax policy. However, it’s important to note that this will mean the UK’s tax burden is at its highest for at least 70 years.
"It remains to be seen whether the reduction in the threshold of the top rate of income tax to £125,140 has an impact on growth, particularly if it seen as punitive by entrepreneurs leading innovative UK companies capable of growing the economy.
"On business taxes, we had already had the news from last month’s reversal of the mini-budget that corporation tax would rise to 25% in April next year so businesses may be relieved that there were no further significant unexpected announcements with the potential to impact profits.
"The government’s decision to significantly increase the windfall tax on oil and gas companies from 25% to 35%, in addition to a 45% levy on electricity generators, is expected to raise £14bn and is an easy win for government as it looks to balance reducing the deficit while providing a platform for long-term economic growth."
'High on stealth-creation and low on wealth-creation'
Michael Sandys, area leader for Liverpool City Region at the Federation of Small Businesses (FSB), said: "Today’s Budget is high on stealth-creation and low on wealth-creation, piling more pressure on the UK’s 5.5 million small businesses, their employees and customers.
"While tackling inflation is essential, so are measures to create conditions for prosperity, growth and support enterprise. Today is a missed opportunity to avoid further economic slowdown.
"Small businesses, which account for more than 16 million jobs in the UK, were already facing an acute cost of doing business crisis through soaring costs, falling revenues, shrinking availability of affordable finance, and a rise in invoices being paid late.
"On top of all that, they now face even higher taxes, cuts to innovation, and a recipe for a longer and deeper recession."
'Economic pain will be felt in UK households'
Steven Mason, an insolvency practitioner and senior manager at Manchester-based Inquesta, said: "Labelled as ‘a plan for stability, growth and public services’, Jeremy Hunt stated firmly that his Autumn Statement shows that ‘this government is on your side’.
"However, there is little doubt that economic pain will be felt in UK households, as widespread tax increases take effect.
"The Chancellor started his speech by acknowledging that the country was now in recession but his measures would result in a shallower downturn, with lower inflation, interest rates and mortgages for the future. Only time will tell if this occurs, or if it worsens things, with an increase in job losses and reduced growth.
"Regarding personal taxes, Mr Hunt said the changes still leave Britain with more generous allowances than any G7 country and several other leading nations."
'Time will tell if they are achievable'
Adrian Young, a tax partner at accounting and business advisory firm HURST, said: "As expected, there was little good news coming from Jeremy Hunt. His delivery too was low-key and had little of the hubris we have become accustomed to from other recent incumbents of Number 11.
"The statement itself combined significant tax rises with even larger cuts in spending. I think the measures have two broad aims, one firmly stated and one certainly more subtle.
"The first clear objective is simply to start filling in the ‘pothole in the road’ to balanced public finances left by his predecessors.
"The second implicit message is to reassure global markets that the adults are back in charge, after years of chaotic leadership in Downing Street. This signal is especially important given the reaction to Kwasi Kwarteng’s mini-budget just a couple of months ago.
"These are both sensible objectives in my view, but time will tell if they are achievable, and if the plans unveiled today are the right ones to get us there."
'It creates an additional need for financial planning'
Jonathan Prescott, director at Praetura Ventures, said: "As anticipated, the measures announced in the Autumn Statement mean that the whole of the UK is going to pay more tax.
"Amongst other measures, freezing the inheritance tax nil rate band and lowering the threshold for the top rate of income tax, means millions more will be pulled into higher tax brackets as the value of their wages and assets rise.
"Whenever such a substantial shift in the tax landscape takes place, it creates an additional need for financial planning, as investors look to manage their way through the various tax implications whilst continuing to work towards their longer-term objectives.
"For financial advisers, this will mean more conversations with clients around succession, pension and tax planning, and a greater demand for tax efficient investment options such as Venture Capital Trusts and the Enterprise Investment Scheme."
'They may well choose to set-up elsewhere'
Mark Heppell, corporate partner at JMW Solicitors, said: "Whilst many business owners who are planning an exit may have breathed a sigh of relief that Capital Gains Tax (CGT) rates and business disposal relief were not attacked, the decision to cut CGT and dividend allowances, coupled with the already high corporation tax rates and ever increasing operating costs, may contribute towards making the UK less attractive for entrepreneurs - in the absence of preferential treatment, they may well choose to set-up elsewhere."
'There aren’t just difficult times ahead, but they are already here'
Janine Smith, director of the GC Business Growth Hub, said: "Rising energy prices and other costs of doing business are impacting all sectors and we understand the huge pressure businesses are facing with their energy bills.
"While today’s budget did not set out any new or additional support for businesses, the GC Business Growth Hub is here to support them through what is an undeniably difficult period.
"The Energy Bill Relief Scheme, which provided a vital lifeline for many businesses, is still due to finish at the end of March 2023, and there is still a small window for businesses to take action reduce their energy usage and their bills.
"Following this, the support for businesses with energy bills from Government will become targeted and we await more details of what this will look like later this year.
“In the meantime, our #HereForBusiness campaign is providing practical support to make a real, immediate difference to businesses and I’d urge any business that have concerns or need help to take a look at what is available.
"The Government has today announced an increase in the National Living Wage, which I know will be welcomed by workers. We know from speaking to businesses there aren’t just difficult times ahead, but they are already here and we stand ready to support them to respond to the challenges in the right way."
'Innovation is the only way we can solve this problem'
Somayeh Taheri, CEO of UrbanChain, said: "The energy retail market has been very rigid and has not evolved as it should have.
"For example, we are seeing more renewables installed on our houses, in our communities, in our cities. But we don’t see enough of the benefits that we should see. There is a monopoly in the retail market - and that’s the wholesale market.
"Before renewables came into play 10 to 15 years ago we had only the large energy generators, such as gas stations and nuclear power stations. Power from them was sold to the wholesale market and suppliers needed to buy power from the same market. And it was a case of selling cheap but buying high.
"Since the rise of renewables, the energy renewable assets have generated, have also been sold to the wholesale market.
"Because the renewable energy has been sold to the wholesale market, fluctuations affect the price of renewable power. And it is still the same old case where energy is bought cheap and sold high.
"The Chancellor is right that we need energy independence and a renewed focus on energy efficiency.
"Innovation is the only way we can solve this problem - and the only way to net zero."
'We are eager to hear clarification'
Katie Gallagher, chair of the UK Tech Cluster Group and MD of Manchester Digital, said: "Despite the impending recession, the tech industry across the UK regions remains strong and vibrant.
"While it’s encouraging to see the mission to become the global Silicon Valley and increased funding to R&D, we desperately wanted to hear more commitments to help both the tech talent pathways to ease the ongoing skills crisis, as well as firm commitments to help early-stage start-ups which are imperative to growing our tech economy.
"We are eager to hear clarification on which part of the previous Northern Powerhouse and HS2 rail commitments will go ahead, as they will help our NW tech businesses recruit and do business.
"We welcome increased funding for devolution, however, the regions need even more freedom to make decisions for their own individual areas, in order to drive innovation and growth that the UK so sorely needs.
"A change to how the Apprenticeship Levy works would have helped businesses unlock more funding to upskill existing staff and bring in new talent pipelines. There should be a huge focus on upskilling the UK workforce, as well as developing our talent pathways right from school age.
"Overall our tech and digital industry across the whole of the UK is strong and innovative, but is being held back by lack of joined-up-thinking around funding in people and skills, as well as ongoing Brexit fallout."
'Today’s commitment to Northern Powerhouse Rail and HS2 is welcome'
Manchester Airports Group CEO Charlie Cornish said: "The UK needs to be serious about levelling-up in the long-term, which is why today’s commitment to Northern Powerhouse Rail and HS2 is welcome, especially in the context of current economic pressures.
"It is disappointing the opportunity is not being taken to deliver NPR in full, including a new line from Manchester to Leeds via a station at Bradford, which would maximise the benefits of this once-in-a-generation investment.
"We remain committed to working in partnership with government on ensuring the North realises its full potential."
'We want to see the detail'
Jessica Bowles, director of strategy at Bruntwood, said: "It’s been well trailed that investment zones as they were previously conceived would go. They were uncosted and unlikely to have boosted growth in a sustainable way.
"The idea of replacing them with something focussed on the research strengths of universities and knowledge-intensive growth clusters is potentially very exciting, particularly if aligned with the Chancellor’s pledge to help turn world class ideas into world class companies.
"The intention to work with local partners and make decisions in the Spring is a sensible approach to getting the best outcomes for our regional cities and the UK as a whole.
"It is good to see the commitment to continue to deliver on infrastructure promises including both Northern Powerhouse Rail and HS2 to Manchester. We have long made the argument that we need both.
"We want to see the detail as the commitment to previous spending plans is currently only for the next two years after which real terms cuts are budgeted.
"Getting the detail of these schemes right and how they work together to operate efficiently for the long term is essential."
'There was some welcome news'
Matthew Johnson, associate partner at Preston-headquartered accountants and business advisors WNJ, said: "The Chancellor’s Autumn Statement confirmed what most small businesses already knew – there are tough times ahead.
Along with the official confirmation of a recession, came a raft of tax rises, including a cut in the dividend allowance from £2,000 to £1,000 next year, and then to £500 from April 2024.
"The Annual Exempt Amount in capital gains tax will be reduced from £12,300 to £6,000 next year and then to £3,000 from April 2024.
"There was some welcome news. A £13.6bn business rates relief package was unveiled to counter the rise in the levy for hundreds of thousands of companies set to take place in April next year.
"However, there was nothing specific put on the table to help businesses counter rising energy prices after April. That needs to be addressed and quickly.
"As expected, there was no further move on the Corporation Tax rate, which will increase from 19 per cent to 25 per cent in April 2023.
"When it comes to growth, the commitment to core Northern Powerhouse Rail and HS2 in the north is to be welcomed. So too is the promise that round two of the levelling-up fund would be worth up to £1.7bn."
'Good to hear confirmation about infrastructure spend'
Chris Fletcher, policy director at Greater Manchester Chamber, said: "It was clear coming into this that there was very little room for manoeuvre by the government set against a worsening economic background.
"But Mr Hunt was clear that the statement did lay out tax rises and spending cuts equalling around £54bn designed in his words to provide stability, increase growth and protect public services.
"The content contained a huge amount of announcements reflecting that every area of government spend was under review and apart from a few, big headline announcements it is clear that the savings and tax increases are spread across a raft of policies with many being kicked down the path to be dealt with by the next government.
"From a business perspective it was good to hear confirmation about infrastructure spend being kept at previous levels although increases are not on the long-term agenda. This will allow vital infrastructure projects like HS2 to Manchester to proceed and the trimmed down version of Northern Powerhouse Rail to at least still be on the books.
"The growth priorities of energy, infrastructure and innovation all make sense and whilst it could have been easy to cut these by maintaining current spending plans the government has shown it recognises the fact that on-going investment in infrastructure and growth measures pay benefits over the longer term."
'Businesses were calling for certainty and a longer-term tax roadmap'
Angela Cross, partner and head of tax in the North West at BDO, said: "The Chancellor set out his stall to prioritise stability, growth and public services through tax rises and spending cuts.
"Given the instability of the past few years, businesses were calling for certainty and a longer-term tax roadmap, so many will welcome some of the announcements signposting planned changes and freezes up to 2028.
"As well as the headline issues around inflation and rising costs, businesses are deeply concerned about supply chain disruption, energy shortages and rising energy costs this winter.
"Our recent Rethinking the Economy research found more than half feel there hasn’t been enough investment in levelling up. The Chancellor announced an update on the proposed Investment Zones that they will be focused around R&D in universities in 'left behind' areas.
"The key will be connecting businesses in the North West with the talent and ideas in these clusters to ensure the investment will effectively drive levelling up."
'There will be concerns about what lies around the corner'
Paul Cherpeau, chief executive of Liverpool Chamber of Commerce, said: "Businesses need clarity and confidence to plan for the future, thereby protecting and creating jobs.
"The Chancellor’s statement will have provided some stability on a fiscal level but there will be concerns about what lies around the corner.
"The decision to freeze employer NI contributions and VAT rates will provide some relief to businesses, but plans to revalue business rates from next year in tandem with forecast inflation increases will leave some business owners fearing the worst.
"We wait to hear more about the planned measures to support smaller businesses affected by this decision, but hopefully they will provide much-needed relief to hospitality and high street businesses.
"We welcome the decision to maintain capital investment support for east-west rail, levelling-up funding and wider infrastructure projects to help connect the UK and grow the regional and national economy. It was also reassuring to hear the government pledge support for innovation spending and commercial development.
"However, the statement said little on green innovation and the government needs to do more to address current labour shortages and boost export-led growth."
'A change of chancellor is always an unsettling time'
Sophie Gilmore, managing director at HybridTec, said: "A change of chancellor is always an unsettling time for any industry, however, we have seen time and time again policy makers from all sides of the political spectrum expressing a commitment to green and renewable energy.
"The energy industry has continued to prosper in the recent climate of fiscal instability, and we anticipate that this will remain the case
whoever is in residence in No 11.
"Take the proposed winter blackouts, for example. Whilst we do not expect these to be required, they demonstrate more than ever the need to generate sustainable power.
"As such, we are confident that our training will continue to be funded, efforts to reach net zero targets will remain on course, and our service users will continue to gain meaningful and sustainable employment."
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