Business leaders in the West Midlands threw their weight behind the Chancellor’s focus on cuts rather than taxes but admitted that the devil remained in the detail about the consequences of the spending squeeze.
Katie Teasdale, head of policy at Birmingham Chamber of Commerce Group (BCCG), said there was also cause for relief that improvements to Birmingham New Street Station and the city extension to the Midland Metro will be preserved.
She said: “We have to prioritise creating an internationally competitive taxation regime in the UK if business is to flourish here. Today gave us the headline figures. We will be waiting anxiously to see how 7.1 per cent cuts year-on-year in the Department for Business, Innovation and skills, for example, will breakdown and the impact it will have on enterprise.
“Clearly the cuts announced today are severe and will impact across the board. Half a million job losses in the public sector between now and 2015 will have a significant effect on the private sector as will inevitable cutbacks in private sector contracts.
“We must now ensure that we all - business and government - have a laser beam focus on creating the conditions for growth which will help the private sector to pick up the slack and genuinely rebalance the economy.”
Louise Bennett, chief executive of the Coventry and Warwickshire Chamber of Commerce, believes that the CSR could not have waited any longer. She said: “The economy both locally and nationally needed this spending review. People from nearly every walk of life will be able to find elements that affect them in a negative way but, in terms of the bigger picture, the whole economy was on the brink of meltdown because of our rising debt. Something had to be done to tackle the rising deficit but at the same time rebalance our economy.”
Black Country Chamber of Commerce President Mike Dell added: “The focus on growth is essential, particularly where it means maintaining capital investments on crucial infrastructure, which will create private sector employment.
“We were pleased by Mr Osborne’s commitment to de-centralising decision making. The cuts to local authority funding of 7.1 per cent need to be accompanied by a drastic reduction in central government targets and clearly local authorities will be looking at the detail of what these reductions will mean on the ground.”
James Watkins, executive director of Business Voice WM, said it was now up to businesses to fill the void left by the shrinking public sector. He said: “Business will need to be imaginative and innovative if it is to fight the supply chain problems that the spending cuts could herald.
“Cuts in social housing will be a matter of grave concern to the hard-pressed construction industry. The hope is that tax increment funding – allowing councils to keep business rates in return for commercial development – will help the sector.”
Graham Bushby, Birmingham-based partner at Baker Tilly Recovery and Restructuring, felt that everybody should knuckle down for the long haul. “Few Midlands businesses will escape the ripple effect of the announced cuts to public sector spending,” he said.
“Taking billions of pounds of spending out of the UK economy will affect the supply chain, from the top down to the consumer and back up again. Those who anticipate and act quickly to address the implications of the cuts are likely to be the fittest in the battle for survival and longer term prosperity.”