John Woodhall welcomes Budget support for West Midlands businesses.
In his first Budget, Chancellor Rishi Sunak showed he was willing to splash the cash to support business development and economic growth with a package of measures that will directly benefit the West Midlands.
First things first, however. Whatever Budget plans had been drawn up surely had to be reworked in light of the spread of the Coronavirus. The central focus of the 2020 Budget was an injection of financial support to help businesses withstand the economic consequences, especially since the situation is predicted to get much worse before we can say it’s business as usual.
According to data from the Greater Birmingham Chambers of Commerce, 28% of local businesses are already feeling the effects of Covid-19 or soon expect to experience disruption to their supply chains or see new order pipelines dry up as events and trade shows are cancelled. We therefore applaud the Chancellor’s move to instil confidence by providing help for workers, businesses and the NHS.
Given the Government’s commitment to spending on infrastructure, funding totalling at least £500 million for transport improvements across the West Midlands was a highlight of the 2020 Budget for our region.
For some time now we have argued that better connectivity between Midlands towns and cities is essential to spearhead business and infrastructure development, promote jobs growth and encourage inward investment. Investment of £20 million in the Midlands Rail Hub is key as it will enable it to move to the next stage and prepare an outline business case for a programme of improvements that will deliver more services, faster trains and an enhanced passenger experience. It is therefore gratifying to see that central government is right behind us. The funding is an example of the economic ‘levelling up’ that has been promised and underlines the Government’s commitment to the Midlands Engine and to driving prosperity throughout our region.
We also welcome the £160 million from the Local Growth Fund which is to be handed over to the West Midlands Combined Authority to speed up delivery of the Eastside Metro extension and the first phase of the Sprint bus rapid transit network. There was further good news regarding £700 million spending on strategic road schemes between 2020 and 2025, including key junctions in Coventry, Walsall and at Birmingham Airport and development of the A5 Tamworth to Hinkley route, supporting growth and housing.
Support for housing in the West Midlands was also high on the Chancellor’s agenda, with the region set to share in a £400 million Brownfield Housing Fund. The need for additional housing cannot be understated, and we are very much in favour of initiatives which aim to protect the green belt by focussing residential development on brownfield sites. In particular, we were pleased to see that the North Warwickshire A5 corridor will receive £79.5 million to deliver 3,880 new homes.
Birmingham has a large number of high-rise residential buildings above 18 m, so a share of the £1 billion Building Safety Fund that the Chancellor has earmarked for non-ACM cladding is both deserved and welcome.
Our region was one of the hardest hit by Storms Ciara and Dennis so we welcome the news that a share of the government’s £5.2 billion funding for a flood and coastal defence infrastructure programme will be coming our way in 2021. The Severn Valley, Tamworth and Solihull will benefit from greater protection for 3,500 properties.
Building on the Transforming Cities Fund, the West Midlands is one of eight mayoral combined authorities to benefit from five-year funding settlements, a total of £4.2 billion, from 2022-23. The Department for Trade and Industry will also champion West Midlands exporters thanks to the Midlands Engine being allocated a share of a £5 million budget for greater face-to-face support. Meanwhile, a share in a further £2 miilion will help to facilitate trade through overseas-based advisers. Our region will also be able to draw on funding for road maintenance and improvements, including a £54 million pot in 2020/21 made available through the Potholes Fund.
With an eye to trade post-Brexit, and to cement the UK’s position as a global leader in cutting-edge technology, including space, electric vehicles and life sciences, the Chancellor has set aside more than £500 million. This money will be used to promote innovations and benefit the supply chain, so a share in it is particularly important for the West Midlands, where the automotive sector accounts for 18% of manufacturing.
Commonwealth Games Economic Legacy
Birmingham is rightly proud to be hosting the 2020 Commonwealth Games and the wider Midlands region is looking to capitalise on the opportunities it brings our way. It seems the Government is determined we should derive full advantage of the long-term economic benefits of one of the world’s biggest multi-sports events and putting some 21.3 million into a Trade Tourism and Investment Programme will do much to achieve that goal.
Given the need to mitigate the fall out from the Coronavirus, some pressing matters have been delayed, including the new review into the reform of the business rates system, which has been put back to the autumn. Whilst short-term measures such as the business rate holiday for the coming year for retail businesses with a rateable value below £51,000 and business interruption loans are welcome, they are just that – short-term – and by no means represent a solution.
Business Rates Issue
Whilst the Budget made funding for small and medium-sized firms a priority, it is bigger businesses on the high street that are closing down outlets, making staff redundant or shutting up shop altogether because they are struggling to pay their business rate bills. We agree with the Greater Birmingham Chambers of Commerce and call on the Chancellor to address this as a matter of urgency once the Coronavirus pandemic is behind us.
Of course, the Government’s commitment to invest in infrastructure improvements to boost business and grow the UK economy does not come without risk, as borrowings will rise to meet its pledges. With this Budget the Government has underlined its determination to live up to its General Election promises. As always, only time will tell whether it proves to be a risk too far.