Budget: Lancashire's reaction
Lancashire's businesses warmly welcomed Chancellor George Osborne's 2013 Budget, which included a number of small cuts aimed at SMEs.Scrapping the duty escalator on beer, and taking 1p off the price, pleased David Grant of Moorhouse's Brewery whilst a pledge to stimulate the housing market with a mortgage guarantee scheme was well received by the construction sector.
Many other organisations pointed to business-friendly measures, such as a £3bn fund to develop the UK's infrastructure, reducing corporation tax and an employer allowance on national insurance, as positive moves that will help stimulate the Lancashire economy and aid growth.The 'generous new tax regime' for those involved with Shale Gas was also lauded, with Cuadrilla currently exploring a number of sites on the Fylde Coast and beyond. The full impact on the local economy is yet to be calculated, but it is widely acknowledged that exploiting the energy source will be of major benefit to local businesses across a number of related industries.
David Grant, managing director of Moorhouse's Brewery, said: "The insidious duty escalator was a stealth tax on the brewing and pub industry. It is great news that it is gone. It was due to run until next year, so, combined with the 1p off, the scrapping means that 11p should be saved on a pint of full duty paid beer over the next two years. This will be a real help for the consumer and pubs in these extremely difficult times. It is the first time for many years that a Chancellor has acknowledged the importance of the brewing industry to the economy."William Ngan, chartered tax adviser and corporate associate at law firm Brabners Chaffe Street, said: "For small businesses the introduction of new employment allowance could mean that they will no longer pay any employers' NICs. This announcement will help small businesses to grow as employment costs are one of the biggest barriers to success they face."
“This budget appears to help some of the North West’s key sectors – Shale Gas is a new industry and needs support, and the construction sector will benefit from the mortgage announcements today. The more helpful tax regimes for employing people will also help growth, as will the recent child care announcements which will encourage female entrepreneurs. Overall, an aspirational budget.”Tony Medcalf, tax partner at Moore and Smalley Chartered Accountants and Business Advisors, said: “The Chancellor has dealt with one of the biggest burdens for small businesses here in Lancashire – the cost of recruiting new staff. The introduction of the employment allowance to pay the first £2,000 of Employer National Insurance Contributions will give a boost to many businesses here in the red rose county who are ready to grow.
“What Mr Osborne has tried to do is give the message that Britain is open for business by also doing things like increasing the rate of R&D relief available to businesses, making it a more attractive place for international businesses to invest and innovate here.“However, we have to remember the economy remains a bit of a mess. The chancellor said the government is reducing borrowing, but all it is doing is reducing the rate of increase in borrowing, which is not the same thing.”
Melanie Christie, North West regional director of the ICAEW, said: “Whilst the economic news confirmed many of our fears, this budget clearly places an emphasis on helping businesses grow. Doing more to help SMEs create jobs, giving them access to professional advice and encouraging lending will continue to make the UK the most attractive place to innovate and run a business. Together, lots of small measures announced today may just add up to a growth strategy which businesses can work with.“However, the fiscal situation continues to be of concern. This budget has reinforced the need for public sector spending to be tightly controlled and to ensure the UK’s deficit continues to come down as a share of GDP.”
Gary Lovatt, FSB regional chairman for Lancashire, said: “A number of measures in the Chancellor’s fourth Budget are potentially a good boost for small businesses. With growth forecasts downgraded there was never going to be any likelihood of a huge giveaway. Further reductions in corporation tax should be a boost to enterprise, while attempts to boost the housing market we hope will filter through and boost the construction sector. The cancellation of the fuel rise in September will help motorists while we hope the beer duty cut will help the pub and hospitality sector."The announcement on the employment allowance which will see businesses forego £2,000 of National Insurance contributions is potentially the main announcement in the Budget, this will help the smallest of businesses across the county to perhaps take on a first member of staff and will also assist businesses with existing costs. We hope that this will start to feed through to the jobs market so that we can look to reverse today’s disappointing news on increasing unemployment levels. We know that small businesses can lead economic recovery and the measures announced today are a step in the right direction.”
Michelle Thompson, partner and head of conveyancing at Forbes Solicitors, said: "First time buyers and people looking to move up the property ladder are winners in the 2013 Budget as George Osborne announced £3.5bn in capital spending over three years to shared equity loans. It is also great news for people looking to move up the property ladder who have a 5% deposit, but can’t afford to raise the rest, as there is now a 20% interest free loan available for the first five years provided the value of the property does not exceed £600,000. It is all positive news at a time when there are already signs of improvement in the property market.”John Cridland, CBI director general, said: "The CBI was clear this Budget needed to deliver a good dose of business and consumer confidence, while being necessarily fiscally neutral. We’re particularly pleased our call for a focus on the short-term boost of housing has been heeded, alongside an increase in longer-term big ticket infrastructure spending. This was recognition it was a mistake to cut capital spending so sharply and that other growth-boosting measures were taking too long. But by shifting £6bn to housing and infrastructure, the government has sowed the seeds for growth and jobs.
“Small and medium-sized businesses will be particularly encouraged that there was money available for the Chancellor to cut the jobs tax through a new employment allowance. We also need to remember the impact of business rates on the hard-pressed high street.”Tim Mills, associate director at Blackburn accountancy and business advisory firm, Pierce, said: “Tax breaks such as reduction in the corporation tax relief to 20 per cent and up to £2,000 of National Insurance relief will certainly help family businesses but these do not apply for at least another year. Likewise, the new Help to Buy scheme is aimed at helping people on the housing ladder thus boosting the house building sector, which could impact many family run contractors in Lancashire. Again, this will take some time to filter through.
“While £1.6m of funding for extra growth was mentioned, we need to see the details behind these schemes. For businesses with staff who commute, employers will be able to offer their staff up to £10,000 per person in tax-free annual season ticket loans.“As detail becomes available it is likely to demonstrate that the budget will include benefits for some family businesses but whether this will be sufficient or soon enough is as yet impossible to know. We’re seeing many businesses in East Lancashire growing and creating jobs through their own volition. It’s a shame we’ve not seen more support from the government today through immediate policies that could give family and owner managed businesses a significant boost.”
Colin Tice, tax expert at Cassons Chartered Accountants, said: "The outlook for the UK economy is not as bright as predicted in the Chancellor’s Budget Statement."George Osborne told the House of Commons that Government borrowing is falling and as a share of GDP will drop from 7.4% in 2013-14 to 5% in 2015-16.
“What it means is that the fiscal deficit, the amount the public sector borrows each year, is forecast to fall. But the official forecast is that the public sector will actually borrow £22bn more next year than this year. Only then will the annual amount of borrowing start to fall. And the annual amount of borrowing is not forecast to fall below this year’s level until 2016/17.“All the while, there will be extra borrowing each year so public sector net debt, the total amount owed by UK plc, will keep rising. Until Government borrowing actually does reduce, coupled with real growth in GDP, the long term outlook for the UK economy does not look good.”