Business leaders across the North have had mixed reactions to the Labour budget which was announced yesterday.

Chancellor Rachel Reeves set out her party’s plans on a range of areas, including funding for potholes, an increase in employer national insurance contributions and investments in AI and 5G, as well as extra cash for day-to-day NHS health budgets and money to fix crumbling schools.

Delivering the first Labour budget in 14 years, Reeves announced that there would be tax rises amounting to £40 billion – and was quick to slam the Tories for failing when they were in power for leaving a £22 billion deficit.

Reeves claimed the scale of the public spending problems she inherited were worse than previously thought.

And there was plenty of news for businesses in the North. Some of them spoke to Business Manchester in response to the announcement.

“Mere drop in the ocean”

Mark Tongue, joint CEO and founder of UK vehicle lease firm Select Car Leasing, which has Manchester offices, cautiously welcomed the additional £500 million funding to repair potholes. But he fears the sum represents a “mere drop in the ocean compared with the enormous scale of the problem.”

He said: “Decades of underfunding in our road network has led to a point where we’ve reached a true crisis point when it comes to potholes.

“The government has already committed billions to road resurfacing – with £8.3 billion of HS2 funding redirected to cash-strapped councils last year. Local authorities have been allocated the money – but can any of us really say the roads in their area have improved? If anything, they’re still getting worse because the rot has well and truly set in.

“Some estimates, including those made by the Asphalt Industry Alliance (AIA), suggest that the true amount needed to fix our pothole backlog is actually around £16.3 billion.”

“Mixed bag”

Connectivity

Phil Wedgwood, CEO at Engage (pictured main) said: “The government’s £500 million investment in 5G, AI, and full-fibre broadband goes beyond infrastructure—it’s about social mobility, too.

“Reliable 5G and broadband mean that our cities are better connected, opening up access to talent and proper employee engagement for businesses across the region. Empowering all regions with advanced digital connectivity will help level the playing field and support economic growth nationwide.”

Carbon capture

The budget also confirmed key investments such as Carbon Capture and Storage to create jobs in the “industrial heartlands”.

Dave Richardson (pictured left) interim chair of the North West Hydrogen Alliance said: “Great news coming out of today’s Autumn budget with confirmed funding for 11 HAR1 schemes in her budget statement, including Barrow-in-Furness located right here in the North West.

“As an Alliance, we’re pleased to see such a strong commitment to the hydrogen and carbon capture sector, which will be essential in decarbonising key industries across the country—such as low-carbon refining, glass, and chemical manufacturing. This support not only helps to protect thousands of existing jobs but also attracts new businesses, moving Britain closer to becoming a clean energy superpower.”

Energy savings

Thomas Farquhar, co-founder of Liverpool-based low-carbon start-up Heatio, welcomed the extension of funding for heat pumps and support for domestic manufacturing of the technology.

He added: “There are also welcome, clear ambitions in the Warmer Homes scheme, which promotes solar and heat pump installations. The government’s £3.4 billion additional funding for 350,000 homes, including 250,000 low-income homes, is especially good news and a step forward in making energy savings accessible for all, especially those most affected by fuel poverty.”

Impact of increases

Over at Primas Law, John Hartley, its business crime and regulation legal partner, talked about the new ‘painful’ tax hikes will place on UK business and the potential fallout from this, including potential opportunities for bad practice, including tax evasion and evasion to avoid increased costs.

He said: “I wonder if due care and attention has been given to the potential impact of some of these increases, particularly in terms of how businesses may attempt to avoid or evade payment.

“In relation to income tax, whilst these have not been increased the thresholds will remain frozen for a further 4 years. As the cost of living increases we may therefore see more and more individuals falsifying their income and undercooking this to avoid higher tax penalties.

“And while much of today’s public outcry centres on increases to Inheritance Tax, the government is naive to think there won’t be attempts made to lessen the burden of this by minimising or falsifying the value of the deceased’s estate by hiding highly valuable assets.

“Clamping down on tax avoidance and misuse has been clearly signposted as a means to raise funds, with a focus on closing tax ‘loopholes’, an appointment of a Covid corruption commissioner to investigate the businesses who used a national emergency to line their pockets and a re-energised HMRC debt recovery taskforce as well as clamp down on tax avoidance schemes.”

Business rates

Chancellor Rachel Reeves says her budget will raise taxes by £40 billion as she delivered Labour’s first Autumn statement in 14 years.

In her opening speech, she said “change must be felt”, and the only way to drive economic growth is to invest.

“There are no shortcuts and to deliver that investment is to restore stability and turn the page on the last 14 years,” she began.

“In July, I exposed a £22 billion black hole, a series of promises they (Conservatives) had made with no ability to deliver. The party opposite hid the reality of their spending. They called an election to avoid making difficult choices. Never again will we allow a government to play fast and loose with the public finances.”

Office for Budget Responsibility (OBR) review

She went on to slam the former Conservative government, announcing that the Office for Budget Responsibility (OBR) had published its own review into the Spring Budget forecast.

The OBR says the Tories did not provide them with “all the information” and if they had known their Spring Budget forecast for spending would have been “materially different”.

Reeves added that any comparison between today’s forecast and the spring forecast would be “false” and confirmed they would be implementing the 10 recommendations from the OBR’s review.

Reeves said: “NHS waiting lists are at record levels, children in portacabins as school rooms crumble and prisons overflowing, crimes which are not investigated and criminals not published – that is the country’s inheritance from the party opposite.

“Their plans relied on a baseline for spending this year which we now know was wrong, because it did not take into account the £22 billion deficit.

“Any chancellor would face the same reality and any responsible chancellor would take action.”

Compensation

She set out by saying Sunak had failed to budget to compensate victims of the Post Office Horizon Scandal and the Infected Blood Scandal.

She said the Labour government will provide £11.8 billion for victims of the infected blood scandal, and £1.8 billion to compensate victims of the Post Office scandal.

Tax avoidance

The chancellor says she will reduce wasteful spending and sets out a 2% productivity savings target for government departments. She said a covid corruption team would be set up.

Modernise HMRC systems and employ more staff, and clamp down on umbrella companies who exploit work and go after the promoters of tax avoidance schemes. This will raise £6.5 billion by the end of the forecast, she says.

National Living Wage

The National Living Wage will increase to £12.21 per hour and the minimum wage for over 21 year olds will rise to £10 per hour, while a change to carer’s allowance will allow a carer to earn up to £10,000 while still receiving the allowance.

National insurance

Reeves says she will not increase National Insurance, VAT and income tax for working people.

But employers’ National insurance contributions will rise from 13.8% to 15%. The threshold at which businesses start paying National Insurance on a workers’ earnings will be lowered from £9,100 to £5,000.

Reeves says she is increasing employment allowance to help smaller businesses. The employment allowance will increase from £5,000 to £10,500, which the chancellor says will mean 865,000 employers won’t pay any National Insurance at all next year.

From 2028-29, personal tax thresholds will be increased in line with inflation.

Inheritance tax

Reeves says she will extend the inheritance tax threshold freeze for a further two years to 2030.

That means the first £325,000 of any estate can be inherited tax-free, rising to £500,000 if the estate includes a residence passed to direct descendants, and £1 million when a tax free allowance is passed to a surviving spouse or civil partner.

The will bring inherited pensions into inheritance tax from April 2027.

Non-dom tax regime

Reeves has announced plans to abolish the non-dom tax regime and eliminate the “outdated concept” of domicile from the tax system starting in April 2025.

This change affects UK residents whose permanent home, or domicile, for tax purposes is outside the UK, allowing them to avoid UK tax on income earned abroad.

More major announcements

• The house was delighted to hear a cut in duty on draft alcohol, which is “a penny off the pints at the pubs.” Alcohol duty rates on non-draught products will increase in line with RPI from February.
• An additional £2.9 billion will be given to the Ministry of Defence.
• There will also be a £2.3bn increase to the core school’s budget to ensure hiring of teachers into key subjects.
• £500 million for road maintenance with special mention of repairing pot holes.
• £22.6 million cash injection for the day-to-day NHS health budget
• VAT will be introduced on private school fees from January and legislation to remove their business rates relief will be made from April.
• Fuel duty will be frozen next year.

Reeves concluded: “I have made my choices, the responsible choices to restore stability to our country and protect working people. More teachers in our school, more appointments in our NHS, more homes being built, fixing the foundations of our economy and investing in our future. Rebuilding in Britain.”

Retaliation

Rishi Sunak responded: “The OBR has declined to back up her claims of a fictional £22 billion black hole. It is deeply disappointing she has sought to politicise this.

“You only need to look at the facts to see that her inherited claims are nonsense. When we left the office the UK was the fasted growing economy in the world.

“During the election she repeatedly promised her plans were fully funded. She said the budget would balance the books. This budget does not such thing and reveals they haven’t been straight with the British people.

“The chancellor has announced a multi-billion billion spending spree. She said she would not fiddle the figures to get better results. She has done exactly that so she can borrow much more and working people will pay the price.”

Officers are continuing to search for David Edmonds (pictured) after he went missing from the Bodmin Drive area of Platt Bridge, Wigan.

Over the last seven days, officers have searched the Platt Bridge and surrounding areas, with multiple specialists deployed to aid the ongoing efforts.

David was last seen at around 11pm on Sunday, October 20, and officers are refreshing their appeal for anyone with any information to come forward.

David is described as being around 5ft 6 tall, and was believed to be last wearing a black puffer-style jacket with a hood, along with dark blue trainers. He may have also been wearing grey tracksuit trousers.

Officers are supporting David’s family.

Chief inspector Glen Rees said: “We are continuing our search for David and I would urge anyone with any information – no matter how small you think it may be – to get in touch with us, as it could prove to be extremely useful for our investigation. 

“We have conducted multiple enquiries, and we would still ask anyone who has any CCTV, dashcam, or doorbell footage from the surrounding areas to please review what material they have, as it could assist us as we continue to build a picture of David’s last known movements.”

If you have any information regarding David’s whereabouts, please contact GMP on 101 or by using the report tool and LiveChat function here: www.gmp.police.uk quoting log 586 21/10/24.

Alternatively, you can report information to the independent charity  Crimestoppers anonymously on 0800 555 111.