Following today’s Budget Statement by the Chancellor, please see Rob’s comments:
- “While the economy is clearly recovering, there is an ongoing concern that this is not a robust recovery, but one based on consumer spending rather than on a strong base of business investment and exports.
- Alongside this, interest rates are low and inflation has been continually outstripping wages and low interest rates, limiting sustainable consumer spending.
- So as a Chamber we were pushing ahead of today’s budget for support for business investment, export growth and investment in skills.
- In particular we were looking for help for businesses to take on, train and invest in young people.”
Commenting on specific measures:
- “Doubling the number of apprenticeships and extending the grants for smaller businesses to take on apprentices by a further 100k grants is great news, as are extensions to degree level apprenticeships. This will make a real difference to the lives and career opportunities of tens of thousands of young people, particularity given the issues around higher education funding. Importantly it will also make a real difference to employers, not just in cost terms but in terms of skills and competitiveness too.
- This is particularly important for Cumbrian businesses which are always looking for opportunities to take on apprenticeships, particularly those progressing to higher level skills, addressing real issues around our demographics and outmigration of young people.”
- Corporation tax and investment allowances
- “The announcements on corporation tax were good news but only a reiteration of what was already announced in last year’s budget. The reductions in the headline rate of corporation tax are of course good news, but far too small a cut to have a real impact on business growth. A radical cut, to say 11%, would have provided a real boost to business.
- It is good though that these cuts are accompanied by support for investment with a doubling of the investment allowance to £500k and extension of this to the end of 2015. From April 99.8% of businesses will benefit from a 100% investment allowance, which is clearly positive for business investment.”
- “The support for exports in terms of reduced air travel costs, doubling the size of the Export Finance scheme and reducing the interest on this by one third and supporting more flights from regional airports is good news, but the Government could and should have gone further in terms of support for exporters – and in particular SME exporters. Boosting UKTI and better subsidies for new exporters and those developing new markets.”
- Energy costs
- “The £7bn package to cut energy costs, for manufacturers in particular, is good news. Energy is a significant and rising cost for many manufacturers and should have a real impact on competitiveness. It is particularly good news for Cumbria given the importance of manufacturing to the county’s economy.
- Combined with the support for investment these should provide a boost to business confidence and encourage investment – particularly among those employers which have been holding back from investment because of concerns about energy costs.”
- Fuel duty
- “Cancellation of the increase planned for September is clearly good news for business and for individuals especially in a county like Cumbria, but this is just cancellation of a planned rise – not a reduction. Again this will also be a boost to confidence and impact on investment given the concerns of Cumbrian businesses around transport costs.”
- Duty on spirits and beer
- “Here in Cumbria we have a vibrant brewing industry – and are seeing investment too in artisan spirits. A alongside this we of course have a significant tourism and leisure economy. The cut in beer duty and freezing of duty on spirits is good news for businesses in these sectors.”
- Homes & Construction
- Measures to support further construction and extending help to buy are good news, both in terms of those looking to get on the housing market and existing owners looking to move, and should help provide a much needed boost to the construction sector, in turn benefiting confidence. This should also mean increased spending through the costs relating to moving house – both transactional and those around decorating etc., widening the benefit.”
- Personal tax allowances and savings
- “Increases in personal allowances are good news, enhancing disposable income for tax payers – enabling them to spend more and making that spending more sustainable. And of course provide a boost to confidence.
- Changes to pensions and savings are similarly good news. There has been growing concern amongst a lot of people about the state of our pensions industry. The situation around pensions has been affecting many people who may otherwise have been tempted to spend or invest. They will now feel more in control of their own finances and more confident and able to spend/invest.”
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