Budget: Lancashire business leaders fear promises for the North may fall foul of coronavirus

More investment in the North West and action on business rates are top of the agenda with many leading commentators in Lancashire ahead of new Chancellor Rishi Sunak’s first Budget.

The Federation of Small Businesses, which has its HQ in Lancashire, has written to the Treasury outlining the measures needed to reinject confidence into the small business community after an unprecedented 18-month optimism slump.

FSB National Chairman Mike Cherry said: “Scrapping entrepreneurs’ relief would destroy the futures of thousands of business owners currently on the cusp of retirement.

Small business owners don’t enjoy the pension opportunities that their employees do – for many, their retirement plan involves selling their business at the end of their working life.”

He said the VAT threshold must be linked to inflation to avoid too many would be dragged into the “hugely burdensome VAT regime”, stifling their productivity.

“While we welcome the Government’s commitment to a fundamental review of business rates to decrease the burden of this regressive tax, it should avoid any moves that bring unintended consequences.

“We worked hard with the previous Government and Small Business Commissioner on a package of reforms to end our late payment crisis. We look forward to working with this new administration to resurrect it: cutting late payers out of public procurement.”

Tony Medcalf, tax partner at Blackpool-based MHA Moore and Smalley said: “More than anything else, I see this being a budget for big spending and infrastructure announcements. The government has an opportunity to take advantage of historic low interest rates to borrow money to invest in infrastructure projects, particularly in the North.

“I think corporation tax will stay at 19 per cent as the prime minister seemed to rule out lowering it to the previously scheduled 17 per cent during a speech at the CBI conference during last year’s election campaign.”

Richard Roberts, partner and head of retail at Brabners, said: “Meaningful reform to the business rates system will still be top of the Budget wish list for many firms – particularly bricks and mortar retailers in northern English towns who have felt the pinch more than most. The new chancellor has supported reform in the past so the sector will be holding onto a slim hope that change is coming.”

Geoff Mason, policy manager at the North and Western Lancashire Chamber of Commerce said: “The priority for the new Chancellor of the Exchequer must be to take swift and tangible steps to inject momentum and confidence into the UK economy.

"Addressing skills shortages, achieving the transition to net zero emissions and fixing the chronic under-investment in infrastructure are vital to help drive economic growth over the long-term.”

Transport for the North has asked the Chancellor to commit to build the £39bn Northern Powerhouse Rail network in full by 2040 and a £7bn Northern Infrastructure Pipeline of road and rail projects in the early 2020s.

Barry White, chief executive at Transport for the North, said: “Our work clearly shows that alternative approaches are not only viable but offer a transformational view of infrastructure investment that would enable the “levelling up” of our region.

“We believe we’re on the path to devolution, and that by setting out a dedicated Northern Budget the Chancellor can empower the North to make the most of our ambitions.”

Mark Schofield, director at Haworths Chartered Accountants said: “Tax and pensions are likely to be high on the agenda, together with increased spending in the North of England, as the Conservatives look to reward voters for helping them take a large majority in December’s snap election.

“Despite vowing to freeze the rates and thresholds for Income Tax, VAT and Corporation Tax for 2020/21, the party has faced heavy criticism from the likes of the Institute for Fiscal Studies who say that radical tax changes are required if we’re to continue funding the NHS and social care.

"Yet if these were to go ahead, it would go against everything that the Conservatives promised in their election manifesto.

“With so much being said around Entrepreneurs’ Relief, it’s almost a given that the tax scheme will be substantially modified, with many predicting an immediate change from 6th April this year.”

Howard Archer, chief economic Advisor to the EY ITEM Club comments: “There has been positive momentum in the UK economy at the start of 2020, but the near-term outlook now looks more challenging with the escalation of the coronavirus outbreak.

The Chancellor has indicated that the Budget will provide more support for families, businesses and the public services affected by coronavirus.

“This is likely to include more money for the NHS which could put further strain on the public finances in 2020/21. However it won’t have a permanent impact on the fiscal accounts, so it shouldn’t ultimately affect the big picture.”

Meanwhile the CAMRA, the Campaign for Real Ale has asked for a duty for draught beer to give pubs some relief against competition from cheap supermarkets beers.