'Little cause for optimism' in spring statement

The Chancellor’s Spring Statement provided little cause for optimism among firms in Greater Birmingham, business leaders said today.

Greater Birmingham Chambers of Commerce said it was disappointed that Phillip Hammond’s speech failed to mention the Midlands – or address ongoing problems engulfing high-street retailers.

On the positive side, Mr Hammond did bring forward apprenticeship reforms, which include giving levy-paying employers the ability to share a greater portion of levy funds across their supply chain, while the co-investment rate for non-levy payers will be halved from 10 per cent to 5 per cent.

A review of payment practices for small companies was also announced.

Paul Faulkner chief executive of the GBCC, said: “Bringing forward changes to apprenticeship reform and reforming SME payment practices are welcome.

“However, it was disappointing to see no reference to the Midlands in the statement and not a single mention of helping firms on our ailing high streets.

“It remains to be seen whether the Chancellor will actually use the Spending Review to introduce long term structural changes around upskilling our workforce in a bid to boost productivity levels across the board or whether he will continue to tinker at the edges of a fraying system crying out for serious investment.”

Mr Hammond also used the statement to forecast an upturn in growth for the next five years and highlight lower levels of debt and a reduction in borrowing.

However, business leaders say his forecasts provide little certainty, given they are based on the Government securing a Brexit deal.

Paul Faulkner added: “The Chancellor made a valiant attempt to accentuate the positives in his latest Spring Statement highlighting the fact that we are witnessing lower levels of debt, a reduction in borrowing levels, an increase in real wages and an upturn in growth forecasts beyond this year.

“Nevertheless, his prognosis is ultimately predicated on the Government securing a Brexit deal and the fact of the matter is that all of these projections could be thrown out of the window if Britain sleepwalks into a no deal scenario in less than three weeks.

“Mr Hammond also used the statement to dangle the political carrot of a so-called Brexit dividend if a deal can be agreed, as in theory this would provide a shot in the arm to business confidence and ultimately cause the financial markets to rally.

“However, the actions of politicians on both sides of the house over the last two years point to a prolonged period of uncertainty as the clock ticks to a scenario that few firms across the country are ready to deal with.

“In particular, early analysis from our latest Quarterly Business Report reveals that business investment in capital expenditure is the lowest we’ve seen in years and a number of firms across the region are facing serious cash flow problems and today’s announcements will do little to create a surge in optimism for local businesses.”