Lancashire's reaction to Chancellor's champagne Autumn Budget
Chancellor Rishi Sunak's apparent big spending champagne Budget has had a broad welcome across Lancashire.
With moves to simplify alcohol duty including a cut in tax on sparkling wines, and 3p off a pint in the pub, along with a chance to claim 50 per cent tax relief on business rates for hospitality businesses, and no further hike in petrol tax, the county's hard-pressed visitor sector has been give some temporary relief.
Some support for people on low wages was forthcoming in the shape of a cut to the tapering off of Universal Credit and a rise in the minimum wage, but one measure not mentioned and announced earlier this month is that from next spring National Insurance tax will rise by 1.25 percent which will hit hard-pressed workers and the businesses that employ them.
Also in the Autumn Statement announcement were increased support for research and development for British businesses, more cash for science and innovation, money for “A Start for Life” parenting programme and cash to end the backlog of court cases.
George White who owns the Number10 Alehouse bars in St Annes and Blackpool said the measures may go some way to help repair the damage the coronavirus pandemic had done to hospitality businesses.
He said: “It is pleasing to see support for our industry in today’s Budget, with the relief in draught beer and cider welcome news. Unfortunately we believe it does little to ease the uncertainty currently surrounding our industry as people’s habits have changed due to the Pandemic.
"We believe more support is needed and the Chancellor could have gone further to try and encourage people back out into our pubs and restaurants. We will have to see if headline grabbing policies will actually impact positively on our industry moving forward.”
Babs Murphy chief executive of the North and Western Lancashire Chamber of Commerce said: “Businesses will broadly welcome this budget.
“The retail, leisure and hospitality sector will benefit from a 50 per cent Business Rates cut for a twelve months period which is great news.
“With the introduction of business rates improvement relief, a new relief to support green technologies and next year’s business rates multiplier cancelled his announcement will be good news for many firms.
“Investment in skills, infrastructure and improved access to finance will be key to driving our economic recovery and will provide longer-term benefits and opportunities for businesses across the country.”
The Blackpool based Federation of Small Businesses also welcomed the long-hoped for move to try to make business rates fair.
National chairman Mike Cherry said: “This Budget has delivered some measures that should help to arrest the current decline in small business confidence.
“But, against a backdrop of spiralling costs, supply chain disruption and labour shortages, is there enough here to deliver the Government’s vision for a low-tax, high-productivity economy? Unfortunately not. Where inflation and forthcoming tax hikes are concerned, the clouds are gathering.
“It’s good to see the Chancellor embrace our recommendation for business rates reform: changing the system so it stops hitting small firms that invest to make their premises more sustainable with higher bills.”
Matthew Johnson, associate partner at Lancashire-based accountants and business advisors WNJ, said: “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 rates 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 announced today, 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.”
He added: “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 Preston-headquartered chartered accountants and business advisers MHA Moore and Smalley, said that an end to the emergency financial measures which have dominated the Chancellor’s budget announcements over the past 18 months may 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.
He said: “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. This is supported by its pledge to increase research and development spending from 0.7 per cent of GDP to 1.1 per cent and an extension to the £1m Annual Investment Allowance until March 2023.
“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.”
Here are the main points from Chancellor Rishi Sunak’s Budget:
– Independent forecaster the Office for Budget Responsibility has scaled down its assumption of the scarring effect of Covid-19 on the economy from 3 per cent to 2 per cent, Mr Sunak told the Commons.
– The OBR has downgraded its unemployment forecast due to the coronavirus pandemic from 12per cent down to 5.2 per cent, the Chancellor told MPs.
– The minimum wage will increase to to £9.50 an hour next year, up from the current £8.91.
– The Universal Credit taper rate will be cut by 8 per cent from no later than December 1, bringing it down from 63 per cent to 55 per cent.
– Alcohol duty is being “radically” simplified by introducing a system designed around the principle of “the stronger the drink, the higher the rate”.
– A “draught relief” will apply a lower rate of duty on draught beer and cider, cutting the tax by 5 per cent on drinks served from draught containers over 40 litres and bringing the price of a pint down by 3p.
– Mr Sunak said he is ending the “irrational” 28 per cent duty premium on sparkling wines and duty on fruit ciders will be cut.
– A planned rise in fuel duty will be cancelled because of pump prices being at their highest level in eight years.
– Flights between airports in England, Scotland, Wales and Northern Ireland will be subject to a new lower rate of Air Passenger Duty from April 2023.
– Every Whitehall department will receive a “real terms rise in overall spending” as part of the Spending Review, the Chancellor said, amounting to £150bn over this Parliament.
– Mr Sunak confirmed a levy will be placed on property developers with profits over £25m at a rate of 4 per cent to help create a £5bn fund to remove unsafe cladding.
– Devolved administrations will be given the “largest block grants” since 1998, with an increase to Scottish Government funding in each year by an average of £4.6bn, £2.5bn for the Welsh Government, and £1.6bn for the Northern Ireland Executive.
– An extra £2.2bn has been announced for courts, prisons and probation services, including £500,000 to reduce the courts backlogs.
– £300m will go towards “A Start for Life” parenting programmes, with an extra £170m by 2024/25 going into paying for childcare.
– The Chancellor said core science funding will rise to £5.9bn a year by 2024-25, a cash increase of 37 per cent.
– A new 50 per cent per cent business rates discount will apply in the retail, hospitality, and leisure sectors, with eligible businesses able to claim a discount on their bills of up to a maximum of £110,000 for one year.
– Ahead of the Budget statement, £7bn transport funding was announced for areas including Greater Manchester, the West Midlands and South Yorkshire for projects ranging from tram improvements to introducing London-style improvements in infrastructure, but only £1.5bn of this was believed to be “new” funding.
– A £6bn package of funding will help tackle NHS backlogs and invest in technology was also trailed ahead of the statement.
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