'No quick fixes' - Black Country businesses react to chancellor's statement

Chancellor Rachel Reeves outlined a crackdown on disability benefits and government department spending as she set out the latest financial position in the House of Commons this lunchtime (March 26).

The announcement came shortly before an Office for Budgetary Responsibility(OBR) report showed UK growth was set to half from predicted levels of around 2%.

But the OBR has upgraded its predictions for growth for the next four years, with inflation expected to hit 2% government target from 2027.

As the region's businesses digested the announcement, Black Country Chamber of Commerce said it wanted to feel a bit more "hope" than had been offered by the Chancellor.

"There are no shortcuts to economic growth but we do want to feel hope and optimism," said CEO Sarah Moorhouse. 

"Chamber members want and need a government that is on the side of business. Instead businesses are feeling battered and bruised by the increased cost pressures looming within days.

"In today’s Spring Statement the Chancellor reiterated her priority for economic growth but recognises there are no quick fixes.

"We welcome planning reform and the jobs that will come with increased building of houses and infrastructure projects and we are optimistic that the increased spending on defence will benefit local businesses – not just in manufacturing but also in technology.

"Moving forward the government must focus on reducing cost pressures for businesses, boosting investment and exports. For the economy to grow, businesses need to thrive. Ahead of the Comprehensive Spending Review we’ll be making representation to our MP’s, ministers and decision makers to make sure they understand the challenges our members are facing. As ever, we have their backs."

In response to the Chancellor’s Spring Statement, Raj Kandola, director of external affairs at Greater Birmingham Chambers of Commerce, said businesses would "breathe a sigh of relief" that no further tax rises were included in the announcement.

“Firms will be pleased to see a focus on planning reform and increased capital investment in order to unlock growth which aligns with the recommendations made by the Business Commission West Midlands this time last year," he said. 

“The additional focus on increased defence spending was accompanied with promising statements on the need for British businesses to directly benefit from the associated procurement opportunities.

“Hopefully this will benefit businesses in the West Midlands given our expertise in the field of advanced manufacturing, as there was next to nothing announced for our region.  

“Ultimately, there was very little announced in today’s statement that will give businesses an extra spring in their step as they approach the summer - for example, no roadmap on reducing business costs and very little on boosting international trade activity.

“The Chancellor has got a big job on her hands to restore confidence and unlock firm level investment.”

Meanwhile James Dickens, managing director of Midlands house-builder Wavensmere Homes, said predicted rises to national insurance and national minimum wages would be a "bruising hit" to businesses. 

“The economic cost of Reeves’ increases to National Insurance, Living Wage, and Stamp Duty will lead to hospitality operators going out of business, be felt by the pockets of all those looking to move onto or up the property ladder, and by the housebuilders vying to deliver energy-efficient new homes," he said.

“However, the extra £2bn in grant funding for the development of affordable housing is welcome. The £600m funding across four years to train up to 60,000 engineers, brick layers, and electricians is also helpful, but much more needs to be done to enable housebuilders and developers to bring commercially viable developments forward that can generate new construction jobs."

Nicky Owen, partner and Head of Professional Practices at Crowe expressed disappointment that the government had not decided to change course on national insurance contribution changes which will lower the threshold at which employers will start to pay the levy.

"It was disappointing to see that the Chancellor has not listened to UK businesses and that there was no U turn in the changes to employers NIC that take effect from 6 April 2025," he said. 

"The NIC changes will impact businesses and will stifle much needed growth in the British economy. Businesses have already started reining in costs and looking at ways to reduce the workforce. This will have an impact on working people and the availability of jobs. A growing economy would bring in much needed increased tax receipts. "