Businesses react to government's autumn budget
Lancashire businesses have given their verdict on Rishi Sunak's autumn budget, in which he promised to prepare the country for a post-Covid “age of optimism”.
Jane Parry, managing partner at PM+M: "Sunak now needs to shift tax focus from businesses."
“The chancellor was hugely positive in his budget speech but actually this budget threw up no real surprises which was mainly due to the numerous ‘leaks’ that some may cynically argue were an attempt to steer the media narrative in advance of today.
“There was lots of great news around boosting spending across the public sector. However, the chancellor is very clearly pushing the burden for paying for that onto business, with the National Living Wage Increase and scheduled corporation tax rate increases adding a significant burden to business. He seems to be banking on this plus the benefits of economic growth increasing the overall tax take to fund us out of Covid.
“From April next year, firms employing people on the National Living Wage will be facing more than an 8% increase in the cost of employing people when you combine the rise in the National Living Wage and the introduction of the Health and Social Care Levy.
“The limited tax reductions announced, such as the reforms to business rates and the cancellation of the planned increase in the multiplier, won’t do much to allay their impact on the industries that have been hit the hardest including those employing the lowest-paid workers.
“These are the very sectors that have already been pushed to breaking point over the past 18 months and are still facing chronic people shortages and rising energy costs. Despite these pledges, they will have the unenviable, and potentially critical decision, of whether they absorb or pass on these costs to their customers simply in order to survive.
“The Levelling Up agenda is another area that needs further work and thought as it appears the government’s view is that levelling up the North West stops at the boundaries of Greater Manchester.
“The news that Greater Manchester will be given £1bn to transform its public transport system is fantastic, but what about the rest of the region? Transport infrastructure in Lancashire, Cheshire, Cumbria and Merseyside still falls well behind their Mancunian neighbours.
“The ability to move easily, reliably, and cheaply between the region’s other hubs like Blackburn, Preston, Burnley, Bolton, Blackpool, Liverpool, Chester and Carlisle is still woeful. Only when this glaring discrepancy is addressed will levelling up here in the North West truly be a thing that can be taken seriously."
Matthew Johnson, associate partner at WNJ: "This is only a sticking plaster."
“Hard-pressed businesses in the retail, hospitality and leisure sectors will welcome the new 50 per cent business rates discount along with the Small Business Rates Relief.
“But really this is only a sticking plaster, it will only last for a year and it doesn’t tackle the bigger issue. The business rate system really isn’t fit for purpose and some real change and different thinking is needed."
“The chancellor has shown that can be achieved with the overhaul of the alcohol duty system, including the ‘draught relief’, which will deliver a 3p permanent cut in the cost of a pint and which is extremely good news for pubs that have been under massive pressure, even before Covid struck.
“The scrapping of a rise in fuel duty is also good news for business, including hard-pressed SMEs. The National Living Wage increase is welcome news for families, however for some smaller businesses it will add to the challenges they face and the fear is it could have an impact on job creation moving forward."
Tony Medcalf, tax partner at MHA Moore and Smalley: "End of emergency measures will give businesses confidence."
“An end to the announcement of emergency financial measures which have dominated chancellor Rishi Sunak’s budget announcements over the past 18 months will give businesses confidence that the economy is returning to a level of stability, allowing them to plan for and invest in their future with clarity.
“The government has spent heavily since March 2020 to support business and employees through the Covid-19 pandemic. While many of the headlines from today’s announcement had already been publicised leading up to today’s speech, companies will also be relieved not to be presented with any additional surprises aimed at reducing government borrowing through increased taxes.
“It appears the government will look to raise additional tax revenues by prompting business investment and economic growth.
“These measures, in addition to several business rates relief measures for property improvements and green investment over the next 12 months and the already announced £7bn regional transport infrastructure will help to stimulate business growth while in turn creating tax receipts as businesses grow and become more profitable.
“Businesses in the leisure, hospitality industry will also be buoyed by the one year 50 per cent discount in business rates after a difficult 18 months for the sector.”