'Businesses still concerned about Budget' despite Rachel Reeves' growth plans

Business groups and economists have responded to Chancellor Rachel Reeves' latest economic growth plans, stating that while they are welcome, the measures in the October Budget will still impact companies.

Ms Reeves has unveiled plans to transform Oxford and Cambridge into "Europe’s Silicon Valley" through a series of housing and infrastructure developments.

She also confirmed the Government's support for a new third runway at Heathrow Airport, expressing her desire for "proposals to be brought forward by the summer".

British Chambers of Commerce Director-General, Shevaun Haviland, stated that the Chancellor has "laid down a clear marker", making companies "sit up and take notice".

"They can lift the gloom that has settled over the economy and give firms real confidence," she said. However, she warned that the Government must ensure "make sure the reality does not fall short of the promise", as companies continue to struggle with increasing costs from the October Budget.

Federation of Small Businesses Policy Chairwoman, Tina McKenzie, praised the "rallying cry for Government to choose growth is exactly what the economy needs", describing it as "rallying cry for Government to choose growth is exactly what the economy needs". She added: "It sends a strong, confident message that from now on growth comes first, and any barriers to that will be erased."

She also commented on the Heathrow decision, calling it "totemic", and applauded the call for quicker action on infrastructure projects.

EasyJet's CEO, Kenton Jarvis, has voiced his support for the airport expansion, stating it would "provide consumer and economic benefits", and enable the airline to "operate from the airport at scale for the first time". Dr Mairi Gibbs, head of Oxford University Innovation, lauded the plans for the Oxford and Cambridge region, which according to Ms Reeves, could contribute an additional £78 billion to the UK’s economy by 2035.

She also emphasised the importance of innovation and scale-ups in driving Britain’s economic growth. Ms Reeves further outlined plans to expedite major projects with new rules set to be introduced in the spring to accelerate the planning system, citing previous decisions as being too slow and "ridiculous".

She highlighted new development schemes in Manchester, Doncaster and other areas aimed at enhancing transport and infrastructure, including the redevelopment of the area surrounding Manchester United’s Old Trafford stadium.

Stephen Phipson, head of manufacturers’ trade body Make UK, described the speech as positive and a "much-needed reset into the debate".

He stressed that expanding Heathrow Airport is "vital if we are to drive economic growth – more connectivity with the rest of the world provides British exporters with more markets to sell their goods and drives inward investment to every part of the country".

The Chancellor has been criticised for a "clear contradiction" in implementing new measures while simultaneously "applying a handbrake" with those announced in the Budget. Businesses are set to face a rise in national insurance contributions (NICs) come April, which they argue could lead to job cuts due to the higher costs of employment.

Steve Perez, CEO of Global Brands, expressed his disapproval, stating that the Budget's measures have "disincentivised" smaller businesses from investing. Commenting on Wednesday’s announcements, he told the PA news agency: "This is all big, long-term infrastructure. We need something more immediate."

He further lamented, "Following the Budget, the Chancellor killed off the goose that lays a golden egg, which is small private family businesses."

These concerns were shared by Robert Colville, director of the Centre for Policy Studies, who acknowledged that although the "vast bulk of the Chancellor’s speech was hugely welcome", the Budget had significantly hindered economic growth.

Echoing these sentiments, Karim Fatehi, CEO of the London Chamber of Commerce and Industry, recognised the necessity of the Heathrow plan but voiced his worries that Budget measures such as the NIC increase are "casting a shadow over our economy".

He emphasised: "If growth is to extend to all corners of our economy, we must see policies introduced swiftly to mitigate them."