'Talk is cheap' - West Midlands business leaders express mixed feelings after region is given short shrift by Chancellor

The Chancellor laid out fresh plans for growth as she vowed to go “further and faster” to kick start the economy.  

In a speech, she told regional and business leaders that economic growth is the number one mission of the Government, and pledged to turn Oxford and Cambridge into “Europe’s Silicon Valley”, while also backing a third runway at Heathrow Airport.

She also made reference to The National Wealth Fund, establishing strategic partnerships to provide deeper, more focused support for city regions, starting in Glasgow, West Yorkshire, the West Midlands, and Greater Manchester. 

But there was little mention of the region in the Chancellor's speech, leaving some West Midlands' business leaders feeling they had had been overlooked.

Emily Stubbs, head of policy at Greater Birmingham Chambers of Commerce, greeted the announcement with a mixed reaction.

"As the Chancellor said, thriving businesses are key to creating wealth, jobs and new opportunities for all of us," she said.

"It was encouraging to hear that the government recognises the importance of building on trading relationships, particularly with our EU counterparts. This was one of the recommendations in the Roadmap for Business Growth, published by our Business Commission West Midlands last year.

“That said, despite mentions of other regions, it was disappointing to hear little on the government’s ambitions to propel growth in the West Midlands by supporting anchor institutions such as Birmingham Airport.

“The Chancellor's refusal to rule out further tax increases in the Spring will also be deeply concerning for many businesses.

“We would urge the government to urgently address the price pressures which remain prevalent for the majority of firms in the region, particularly with the business tax rises announced in the recent Autumn Budget on the horizon. 

“Businesses need a clear plan from government on how they will reduce these cost pressures in the coming months - particularly when it comes to minimising trade disruption, making it easier to hire staff and reducing energy costs.”

There were also details on Investment Zones, with the Wrexham and Flintshire Investment Zone to focus on the area’s strengths in advanced manufacturing. 

After autumn's budget, businesses face an increase in national insurance contributions (NICs) in April, which they say could lead to job cuts because of the increased cost of employing people.

Ruth Ross, chief executive of Shropshire Chamber of Commerce, said: "It’s all very well to throw around words like action, dynamism and optimism, but this has to be backed up by business-friendly policies – because it’s employers who need to spearhead the UK’s economic growth.

"Businesses in Shropshire feel like they were bashed by the Budget, and the increased costs they are having to bear in areas like National Insurance have undoubtedly diluted their ability or enthusiasm to recruit, diversify or expand.

"Our latest quarterly economic survey revealed some of the most downbeat forecasts from the local business community since the pandemic.

"Asked about the Budget’s impact on the local business community, 72 per cent described it as negative, and not a single employer felt it was positive. That’s not a recipe for growth.

"The proportion of Shropshire businesses now seeing taxation as a ‘fear factor’ in the coming months has jumped by a huge 40 per cent, and there has been a 14 per cent fall in businesses reporting rising sales.

"Workers were told that the pound in their pocket is safe – not so, say businesses in Shropshire."

Bosses at Birmingham Airport welcomed the news that Heathrow would be getting a third runway, as the airport looks to roll out its own expansion program this year. 

A spokesperson for the airport said: “We welcome this Government’s support of sustainable airport expansion which will turbocharge UK growth through investment and job creation. 

"We have capacity ready to be unlocked within our existing infrastructure and through significant investment this year, we will see further improvements and efficiencies realised in our terminal and on the airfield. 

"With the future arrival of HS2, we will be connected to central London in less than 40 minutes supercharging our catchment area, providing more choice and convenience for millions more.”

Tony Hague,  CEO of Cheslyn Hay-based PP Control & Automation, one of the UK’s leading strategic manufacturing outsourcing specialists, also reacted to the speech. 

His company employs 200 people at its state-of-the-art factory in the West Midlands.

Mr Hague said: "Nothing in the chancellor’s speech was overtly negative, in fact the language was positive, and businesses will welcome the genuine change in tone and direction to speed up investment, remove bureaucracy, and press ahead with a new modern industrial strategy. 

"It feels like Rachel Reeves and her team have finally woken up to the fact that talking down the economy is not the best driver of growth!"

"I also welcome the firm focus on national government and local councils working closer together with business, and the wider community will acknowledge the potential economic benefits of the proposed infrastructure projects.

"However, as with any strategy and political speeches, they can communicate all the right signals, but the question remains on how the grand ideas will actually be delivered.

"That is the overarching sentiment from today’s speech - promising words but talk is cheap. Let’s keep an eye on the execution.”

Stuart Anderson, MP for South Shropshire and former MP for Wolverhampton said the announcements showed the Government was in trouble. 

"If the Chancellor is having to do a reset after six months of being in power it shows they have problems," he said.

"The reset should be to overturn her disastrous budget or they will be scratching their heads in a few months wondering why there is no growth.” 

Fellow conservatives reiterated their attack on the October Budget, saying it was one of “the biggest barriers to growth in this country”.

Shadow chancellor Mel Stride said: “The biggest barriers to growth in this country are Rachel Reeves, Keir Starmer and their job-destroying budget – and nothing in the Chancellor’s speech proved otherwise.

“What’s worse, the anti-growth Chancellor could not rule out coming back with yet more tax rises in March.

“This is a Labour Government run by politicians who do not understand business, or where wealth comes from. Under new leadership, the Conservatives will continue to back businesses and hold this Government to account.”

Shevaun Haviland, director-general of the British Chambers of Commerce, said the Chancellor has “laid down a clear marker” and that the plans will make companies “sit up and take notice”.

“They can lift the gloom that has settled over the economy and give firms real confidence,” she said.

She added that the Government must “make sure the reality does not fall short of the promise”, adding that companies are still “struggling with increasing costs” from the October Budget.

Tina McKenzie, policy chairwoman of the Federation of Small Businesses, said the “rallying cry for Government to choose growth is exactly what the economy needs”.

“It sends a strong, confident message that from now on growth comes first, and any barriers to that will be erased.

“This decision on Heathrow is totemic, and faster action to unblock decisions on infrastructure projects is entirely right.”