The Autumn Budget 2021 was chock-full of spending pledges and support for businesses but business groups have questioned whether the measures go far enough for the UK's six million small firms.
A Budget full of spending announcements ensured there was something for everyone in the chancellor's speech; however, while the measures were generally welcomed by business groups, looming tax hikes and rising inflation cast a long shadow over Rishi Sunak's Autumn Budget.
At the same time, hopes for radical reform of the unpopular business rates system quickly faded as the chancellor announced some time-limited changes that will help high street businesses in the short-term but don't come close to levelling the playing field between the high street and the online retail giants.
Reactions to this Budget have been fairly mixed as business groups pore over the detail. But it's the big picture that counts and one thing that the leading business bodies agree on is that the chancellor may well have to do more to support businesses as we head into a tough winter.
Here's what the UK's leading business groups had to say about the Autumn Budget:
Institute of Directors: Business rates reform not enough to compensate for looming tax rises
Kitty Ussher, IoD chief economist: "The crucial test for this Budget was whether it gave business the confidence to invest. The chancellor's business rates and R&D tax credit reforms are welcome but with hefty hikes in other taxation on the horizon, that may not be enough to convince business leaders to press go on their plans for growth.
"He had an opportunity to partially reverse his previous decisions on employment and profit taxes, made in tougher times, but he chose not to do so.
"While promising a 'skills revolution', the actual measures that were announced, while welcome, felt piecemeal, and will not give business confidence that we have a coherent plan to prevent future labour shortages for our post-pandemic era outside the EU."
Federation of Small Businesses: Not enough to create a high-growth, high-productivity, high-wage, low-tax economy
Mike Cherry, FSB national chair: "This Budget has delivered some measures that should help to arrest the current decline in small business confidence. But, against a backdrop of spiralling costs, supply chain disruption and labour shortages, is there enough here to deliver the government's vision for a low-tax, high-productivity economy? Unfortunately not. Where inflation and forthcoming tax hikes are concerned, the clouds are gathering.
"It's good to see the chancellor embrace our recommendation for business rates reform: changing the system so it stops hitting small firms that invest to make their premises more sustainable with higher bills.
"That said, much more will be needed to support small employers in the months ahead … If the OBR's concerning inflation forecasts come to pass at the same moment when national insurance contributions and the living wage rise significantly, many small firms will be considering their futures - we've already lost close to half a million over the last year."
Small Business Commissioner: Business Rates cuts were the star of the show for small firms
Liz Barclay, Small Business Commissioner: "Many of the measures announced may improve the small business environment. The cuts to Business Rates were the star of the show for small businesses … but with inflation predicted to hit 4%, there really is fear in small business hearts. So it's all the more important that bigger customers pay small suppliers quickly for the work that they're doing so that those small suppliers can pay their costs and keep their labour and then eventually invest and create jobs. That's what we need to see because we need our small businesses at the forefront of driving this recovery."
British Chambers of Commerce: "Much to welcome in this Budget"
Shevaun Haviland, BCC director general: "The chancellor has listened to Chambers' long-standing calls for changes to the business rates system and this will be good news for many firms. This will provide much needed relief for businesses across the country, giving many firms renewed confidence to invest and grow.
"Additional investment in skills, infrastructure and better access to finance will be key drivers for our economic recovery and will provide longer-term benefits and opportunities for businesses across the country.
"Businesses have been battered by 18 months of the pandemic and … there may still be difficult months ahead. If firms face unexpected bumps in the road, the chancellor must be prepared to take further action to enable the economy to fire on all cylinders again."
Forum of Private Businesses: "Budget lets down small businesses … once again"
Ian Cass, FPB managing director: "The relief provided to businesses during the pandemic by postponing business rates saved many businesses from closing. To save our high streets those same businesses need that relief to continue. The 50% allowance for hospitality sector businesses is clearly welcomed, and providing reliefs for green investment is fine, but many of the retail shops that our communities rely on still face what they see as unfair business rates, and deferring the reviews until 2023 risks kicking the can down empty high streets.
"The use of online services accelerated during the pandemic, quite understandably, and it is a shame that the chancellor has not similarly accelerated a fair Business Rates regime across all levels of business."
CBI: A business-friendly Budget … but it doesn't go far enough
Tony Danker, CBI director-general: "Today, the chancellor has shown a genuine willingness to listen to business with measures that will get firms innovating and help the economy to grow. It takes several positive steps forward, but isn't bold enough to deliver the high investment, high productivity economy the government seeks.
"On business rates, the chancellor made real strides in making the system more palatable for businesses in the shorter term … But the hard truth is that wholesale reform to unlock investment was rejected today. The government missed the opportunity to truly reform a business rates system that diminishes Britain's high streets and factories.
"This Budget alone won't seize the moment and transform the UK economy for a post-Brexit post-COVID world. Businesses remain in a high tax, low productivity economy with concerns about inflation. But the Budget will have a positive impact across the economy and makes several changes that will be welcomed by UK businesses."
Small Business Britain: A back to business budget
Michelle Ovens, founder of Small Business Britain: "This is a 'back to business' budget. However, many small businesses still have a way to go to get their business 'back to thriving' again.
"Investment in infrastructure, skills and innovation are welcome, and the business rates relief for retail, hospitality and leisure is a very positive, timely step and will go a long way to help small businesses in these hard-hit sectors … But we need to see opportunities for small businesses in the announced £30 billion green fund and ensure that the smallest businesses can access the R&D relief and increased local government investment."
Written by Rachel Miller.
Image supplied by Number 10 on Flickr.