Businesses in Liverpool have given Rachel Reeves’ spending review a resounding thumbs down.
They were speaking at an exclusive business breakfast event organised by RSM and NatWest, in conjunction with BusinessCloud.
Thomas Farquhar, co-founder of Heatio, said: “It seemed to be lacking in business support or anything to grow small businesses, which are the backbone of the economy. It was disappointing.
“I would have liked to have heard something to give businesses a reason to invest, a reason to hire people, give them more hours. There didn’t seem to be anything to stimulate growth.”
Antony Shimmin, chief operating officer and co-founder at MyCardium AI, said: “There isn’t too much there at the moment that indicates how the Government is going to provide practical support to businesses like ours.
“It’s a challenging climate, particularly when it comes to raising money for a lot of businesses and at the moment I’m not seeing anything practical that I can hang my hat on.”
Dean Ward, co-founder of Evoke Creative, said: “To be honest there were no surprises from the spending review. It was more focused on public spending, healthcare and addressing (the) public sector across the country. I was expecting something around business.”
An audience of 75 attended the business breakfast at Liverpool’s Hope Street Hotel, which also looked at the Labour Government’s performance since last July’s landslide general election victory.
RSM economist Thomas Pugh said the spending review was for the long-term and increased the likelihood of further tax hikes.
“It’s brave but it doesn’t do much to help right here, right now,” he said. “The spending review makes tax rises in the Autumn slightly more likely because the spending plans for those unprotected departments, like the Home Office, still look very, very difficult to achieve.
“It’s the things that weren’t in the spending review that will make the biggest difference, those U-turns on welfare payments, higher interest rates, they’re the big things that are going to mean the fiscal headroom she had in March are probably gone already and tax rises in the Autumn look pretty likely.
“The scale of tax rises won’t be big enough that they need to break those manifesto commitments. I don’t think they’ll go back to business taxes, they’ve done that.
“We’re probably looking at fuel duty going up for the first time in a long time and some of those changes to pension relief.”
He said adding 1p to income tax would have been less damaging than increasing the rate of National Insurance.
Neil Bellamy, NatWest’s Head of Technology, Media and Telecom, said: “My take is there’s a lot of uncertainty out there. The macro geopolitical market is not doing anyone any favours.
“My advice to our clients at the moment is to have plenty of cash headroom in your business so you can see out the next three years.”
Helen Cross, digital and creative sector lead at Growth Platform, said having a Labour metro mayor and a Labour Government had brought about closer working.
One positive story she highlighted was the case of Kyndryl, a major IT infrastructure services provider, which is creating a technology hub in Liverpool that will create up to 1,000 jobs.