After several years of inflationary pressures, labour shortages, rising borrowing costs, geopolitical uncertainty and weak productivity growth, Birmingham employers were looking less for headline-grabbing announcements and more for stability, certainty and evidence of a long-term economic plan.
So, did John Healey's first Budget as Chancellor live up to the hopes and expectations of local employers? Here's what local companies had to say:
Becky Lane, CEO of Birmingham-based retrofit company Furbnow, said: “An extra £100 off energy bills will be a welcome relief for households on the lowest incomes, particularly as we head into the coldest months of the year. For families already struggling to heat their homes, every pound counts.
“But there's a risk that households just above the eligibility threshold, who are also struggling with rising bills, get left behind. And while this support will help people through winter, it doesn't address why so many families are paying so much to heat their homes in the first place.
“The Government needs to look beyond short-term discounts and help households make their homes cheaper to run permanently. Better insulation and more efficient heating can save families hundreds of pounds every year, rather than leaving them dependent on another round of bill support next winter.
"Moving green levies into general taxation might make energy bills look cheaper, but it doesn't make the underlying costs disappear. Households will still be paying for them, just through a different route.
"The bigger question is whether the Government is doing enough to help families use less energy in the first place. Making homes better insulated and more efficient is one of the few ways to bring down bills year after year, rather than simply shifting costs around."
Emily Stubbs, head of policy at Greater Birmingham Chambers of Commerce, said: “The big news for many Greater Birmingham businesses comes in the form of fiscal devolution. The announcement that by 2030 the West Midlands can anticipate full business rates retention, alongside partial income tax retention presents a significant opportunity, provided these new freedoms are used in genuine partnership with business to unlock investment, strengthen infrastructure and tackle the barriers holding back regional growth.
“More immediately, there were also some positive announcements for founders, business leaders and start-ups, particularly those just taking the initial leap to start their entrepreneurial journey, and self-employed parents.
“The extension of business rates reliefs for retail, hospitality and leisure firms will also be welcomed. However, it is incredibly disappointing to see yet another Chancellor swerve the call for meaningful business rates reform and choosing to simply patch over the cracks in a fundamentally flawed system.
“As in previous budgets, increased investment in defence, alongside ambitions to expand the UK’s defence industrial base, may offer new opportunities for local businesses, particularly many manufacturers here in the West Midlands already engaged in automotive supply chains.
“More broadly, increased funding to crowd in business investment, through the National Wealth Fund and British Business Bank, investment in sovereign AI, and the new UK Export Finance guarantee are positive. Nevertheless, many firms will be disheartened by an underwhelming Budget overall.”
Jayne Hussey, partner and head of the Midlands office at Mills & Reeve, said: "Many Midlands businesses were hoping for a low-key Budget that was more pro-growth and less short-term revenue-raising and that’s what they got.
“The overriding desire from regional businesses has been one of stability – certainty on tax policy and a long-term plan that rewards those willing to take risks, put the effort in and invest, not only in their own business but in the Midlands economy. Did we get that? Yes.
“Measures to address business rates and rising employment and energy costs will be welcomed by regional businesses, particularly at a time when the region’s employment rate has declined, while economic inactivity has increased. The question now is did they go far enough to increase confidence and drive growth?
“The big question on capital gains tax (CGT) was answered, and the chancellor held his nerve choosing not to meddle with the current CGT top rate of 24% – instead backing entrepreneurs who are trying to build brilliant businesses that create high-quality jobs through initiatives such as a newly-announced founders’ relief and a scale-up programme for female founders.
“Ultimately, we must build a system that incentivises investment and entrepreneurship. Businesses need a fair and stable tax framework. Taxes are levied directly on companies but also on the individuals who own those companies, so a fair regime that reflects the risks and effort entrepreneurs put in will generate growth as well as the longer-term tax revenue for the government to invest in the UK.”
Richard Parker, Mayor of the West Midlands, said: “I firmly support the Chancellor's commitment to fiscal devolution, giving mayors greater powers and financial freedom to shape the future of our regions. This is a generational change in who holds the purse strings and who benefits from the wealth our region creates.
“It's a really simple idea, but it's huge. When businesses in the West Midlands grow, when we create new jobs and when local people earn more, our region should get a greater share of that success. More of the money generated here will stay here, so we can reinvest it in our communities.
“But I also know people need help today. Families across our region are feeling the squeeze, so the £100 energy payment for millions of households this winter with action to bring down energy bills and an increase in the minimum wage and pensions will make a real difference right now.”
Stuart Brodie, VAT Partner at Claritas Tax, said: “The Government is moving in the right direction, but it has not gone far enough. Making marketplaces responsible for collecting VAT can strengthen compliance. Keeping a £90,000 threshold per platform, however, risks building a route around that responsibility into the very rules intended to tighten it.
“A compliant VAT-registered retailer should not be undercut by a competitor that fails to account for VAT when it should. Marketplace collection offers a way to address that unfairness and concentrate collection in a relatively small number of platforms, rather than leaving HMRC to pursue individual non-compliant traders. But the reform will fall short if businesses can arrange their sales to escape marketplace collection.
“Genuinely small businesses need proportionate rules. That does not justify a separate £90,000 collection threshold on every platform. A per-platform test creates an obvious incentive to spread sales across marketplaces, keeping each below the limit. Businesses could also seek to fragment activity between legal entities. The rules should close off those opportunities, not invite them.
“The answer is a nil threshold for marketplace VAT collection. That would remove the per-platform threshold loophole: spreading sales across platforms or splitting activity between entities would no longer keep those sales below a marketplace collection limit.”
Neil Lloyd, chief executive of FBC Manby Bowdler and the Adeptio Law Group, welcomed the move to raise the business rates threshold from £12,000 to £18,000 which would mean some 75,000 small businesses, shops and hospitality venues avoiding the charge.
“I am very pleased to see the move on business rates which is long overdue and will help many small and mainly retail businesses across our region. I think the Chancellor’s decision to reduce his economic headroom shows just how tight a corner he was in ahead of today’s speech and the limited wriggle room he had available.
“This was a speech very much designed to give him and the new prime minister some breathing space and he announced little which will significantly move the dial for business.
“I’m of course pleased to see further investment in training and skills and the £100m investment for local apprenticeship services to match young people with local firms is welcome.
“I would have liked to see stronger, more targeted interventions to support skills development, whether through enhanced training incentives, clearer vocational pathways or more support for regional skills programmes. Without a long‑term plan to grow the UK’s skills base, businesses will continue to face constraints that no single Budget can fix.”
Philip Pepper, partner in the employment law team at Shakespeare Martineau, said: “Many businesses will be taking a sharp intake of breath and reviewing their balance sheet, knowing that tough decisions will have to be made. While on the surface the increase may only seem a few pence per hour, annual basic pay also is used to calculate National Insurance and pensions contributions, overtime payments and many other benefits.
"Employees earning above minimum wage may also want increases, to maintain existing payment bands. This means the true cost to the employer is unfortunately much higher than it first appears.
“Sectors such as construction, retail, social care and hospitality will be particularly targeted by these measures, all of which are contending with a number of other pressures, such as ongoing supply chain disruption, skills and labour shortages, and a decrease in consumer spending. These costs will likely be passed on to the consumer, further exacerbating the cost-of-living crisis, resulting in people needing higher wages to live, and so the cycle continues.
“Although the changes won’t come in immediately, employers need to act quickly. Identify affected workers and calculate the direct and indirect cost, including any benefit calculated using basic pay, to assess the impact.”
Joga Singh, Central Region market leader and market senior partner at PwC UK, said: “The pace and scale of devolution is significant, and for the West Midlands it creates a real opportunity to put more decisions and investment in local hands. The £285mn Good Growth Funds and £1.5bn mayoral financing facility, alongside investment in the Black Country Metro extension, £10m for Stafford Market Hall and an SME business incubation hub, demonstrate the scale of that ambition.
“But greater powers need to be matched by the capability, collaboration and insight to be able to deliver, particularly across the Midlands with its diverse mix of businesses, from entrepreneurs and SMEs to major employers. The £150m investment in building capacity and capability across strategic authorities recognises that challenge. Ultimately, success will be measured by whether greater local control translates into investment, skilled jobs and stronger growth for businesses and communities across the region.”
