Craig Humphrey, Chief Executive of the Coventry and Warwickshire Growth Hub, reflects on the Spring Statement delivered by Chancellor Jeremy Hunt
Whether the Spring Statement will bring much-needed confidence to the UK economy, only time will tell.
The much-heralded 2p reduction in National Insurance will put more money in employees’ pockets which is a positive since it will make work more attractive, and have the knock-on effect of bringing more people back into the labour market - particularly those who decided not to return to work following the pandemic.
The predictions from the Office for Budget Responsibility that inflation is due to fall further and below the 2% target from a high of 11% is good news for the economy since it shows business confidence is slowly returning.
At a time when Coventry and Warwickshire – like most of other areas of the country – is struggling to recruit and attract workers with the right skills in some sectors, this could encourage people back into the workplace.
Productivity is key to the long-term success of UK plc and full expensing has seen an increase in business investment, which is predicted to rise further to 10.6% of GDP to boost productivity and wages, extended to lease assets.
Small businesses are the backbone of our economy and for small business owners there was a welcome increase in the VAT threshold from £85,000 to £90,000 which will make a difference when every penny and pound counts as energy bills and business rates continue to hit many firms hard.
Coventry and Warwickshire is renowned for its expertise in the digital creative sector -particularly in Leamington and the surrounding areas - which has been dubbed Silicon Spa, and unlocking more pension fund capital for the tech sector will help with investment.
I’m a big believer in shifting decisions to a more local level, since the local business community and stakeholders are aware of each area’s needs, so it was encouraging to hear that a Level 2 devolution deal has been agreed with Warwickshire.
Once it has been ratified by Warwickshire County Council, it will give the local authority more control and influence over local growth by the transfer of new powers and funding.
The deal also emphasises the importance of stakeholders continuing to work together to ensure the independence of the local business voice is maintained within Warwickshire.
Finally, it was great to hear Binley in Coventry receive a mention in the Budget since the area will benefit from Levelling Up funding for a cultural project.
Coventry and Warwickshire has a resilient economy, and we hope that given stability we will return to sustained growth in the foreseeable future.
