Budget 2026: Short-term measures offer little to stimulate North West business growth

Tony Medcalf, North West tax partner at national accountancy and advisory firm MHA, said:

“Amid high borrowing costs and growing demands on public spending, today’s announcement from Chancellor John Healey was largely, as expected, a cautious attempt to balance the need for short-term relief for households with maintaining confidence in public finances. However, the government appears to have prioritised measures which will appeal to voters rather than significantly stimulating business-led economic growth.

“Extending VAT cuts on electricity bills, removal of the standing charge for gas bills, a further extension of the 5p fuel duty cut and increased taxes on banks and gambling companies will be popular with voters. However, while an increase in the business rates threshold for retail hospitality and leisure businesses from £12,000 to £18,000 and greater control over regional spending will be welcomed by the North West’s business community, there is relatively little here which will fundamentally improve business confidence or change the economic outlook.

“There has been speculation that the politically popular measures announced today are designed to build public confidence ahead of a potential early general election. Whether that is the intention or not, the prospect of another election would only add to the uncertainty businesses are facing, compounding rising costs and low economic growth.

“Companies across the North West have demonstrated resilience despite rising energy and employment costs and continued economic uncertainty. With the OBR now forecasting growth of just one per cent next year, businesses need a stable tax environment and meaningful incentives to invest, recruit and expand. Ultimately, a budget designed to be popular is not necessarily one which delivers the sustained economic growth our region and our country needs.”