Business News Round Up (23/11/2023)
Autumn Statement reaction: a “tax-cutting” statement that continues to raise taxes amid allowing growth – and what does this mean for Scotland?
Chancellor of the Exchequer Jeremy Hunt made much of his tax-cutting credentials in the Autumn Statement he delivered earlier today. The main rate of national insurance contributions (NICs) was cut for both employees (from 12% to 10%) and for the self-employed (from 9% to 8%), in addition to abolishing class 2 NICs altogether. But looking at the tax to GDP ratio tells a different story. The tax burden – the percentage of the nation’s income going to the government – is still on track to rise to a post-war high. The OBR forecasts that the tax-to-GDP ratio will be at 37.7% at the forecast horizon in 2028-29. Although this is lower by 0.7 percentage points than it was forecasted before the measures were announced today (November 2023 pre-measures forecast), this is the highest level since the 1940s.
Investment Zone confirmed for Greater Manchester
A new Investment Zone has been confirmed for Greater Manchester in Chancellor Jeremy Hunt’s Autumn Statement. Hunt outlined 110 measures to grow the economy and level up the country, adding that his proposals would unlock investment, reduce debt, and reward work. Three new Investment Zones were announced for England – in the West Midland, East Midlands, and Greater Manchester. Together, these are expected to catalyse £3bn private investment and support the creation of 65,000 jobs. The government previously announced plans for 12 zones in the Spring Budget, with West Yorkshire confirmed as a location earlier this week, following on from South Yorkshire and the Liverpool City Region. The Greater Manchester Investment Zone will focus on advanced manufacturing and materials and local partners expect it to help to leverage £1.1bn in private investment and help to create 32,000 jobs in the region over the next ten years.
https://www.insidermedia.com/news/north-west/investment-zone-confirmed-for-greater-manchester
Record number of businesses close across the UK – ONS
A record number of businesses closed across the UK last year, official figures have shown. The data from the Office for National Statistics also reveals that the so-called business death rate surpassed the “birth rate” of new businesses being founded in 2022 for the first time since 2010. The figures show 345,000 businesses across the UK shut their doors in 2022 – a 5% increase on the 328,000 that closed in 2021, and the highest figure since records began in 2002. Meanwhile, 337,000 new businesses began trading nationwide in 2022 – down from 364,000 the year before. The Institute of Directors (IoD) blamed the increase in business closures on the cost-of-living crisis, the economic fallout of Russia’s invasion of Ukraine, and emerging from the restrictions of the coronavirus pandemic. In total, there were 2.9 million active businesses in the UK last year. It meant the business “death rate” rose to 11.8%.
https://uk.finance.yahoo.com/news/record-number-businesses-close-across-122948265.html
Made Smarter national roll-out to turbo charge Scotland’s SME manufacturers
Made Smarter, a programme helping SME manufacturers access technology and digital skills, is to be rolled out to Scotland. The Government has committed to expanding the Made Smarter Adoption Programme to all nine English regions in 2025-26 before working with Scotland, Wales, and Northern Ireland from 2026-27. The announcement by HM Treasury, on Friday November 17, means hundreds of thousands more SME manufacturers will get access to technology advice, leadership, and skills training, as well as grant funding for digital internships and technology projects. The commitment, alongside plans for £4.5 billion in funding for British manufacturing, will also boost productivity, growth, and decarbonisation for SME manufacturers across the country. Launched in the North West in 2019, the Made Smarter has engaged with 2,500 manufacturers and funded 334 technology projects, which are forecast to create 1,550 jobs, upskill 2,772 existing roles, and increase North West GVA by £242m.