Why did Hammond and May find this budget so amusing?
Philip Hammond’s first Budget as Chancellor of the Exchequer – saw the Government reveals its tax and spending plans for the next 12 months.
Hammond and Prime Minister Theresa May appeared to to be in good spirits, delivering the news – often caught on camera laughing vociferously.
But did the South West’s business community find it as amusing?
Nick Sturge, South West chairman of the Institute of Directors, comments:
“There is more in this Budget than we anticipated. From the South West’s perspective, we particularly welcome the announcement on T-levels, aimed at boosting technical education, because lack of technical skills, especially in areas such as construction and engineering, is a timebomb waiting to go off.
“This will be exacerbated by our departure from the European Union and a constriction of foreign workers, so it is critical this issue is addressed quickly to mitigate against a short term skills gap.”
He continues: “As the South West has one of the lowest levels of young people going into Higher Education combined with one of the highest demands for skilled enginneering and knowledge economy ready talent, T-levels present an exciting opportunity for our oft-forgotten economic powerhouse of the UK.
“Setting funds aside for more R and D will help offset any loss of EU finding and secure the role our Universities and research institutions play in developing home grown talent.”
Regarding business rates Victoria Duxbury, Managing Associate PDL at national law firm Bond Dickinson LLP, said: “This time last week the business world welcomed the Supreme Court’s decision in Newbigin v Monk which confirmed commercial properties undergoing redevelopment or major refurbishment are to be effectively exempted from business rates during the works.
“Today, the Chancellor has made more business rate headlines which this time will come as good news for smaller businesses. ”
“There will be a cap of £50 per month on increases that will apply to those businesses coming out of small business rate relief. This will clearly help some small businesses but will do little for larger businesses, especially those based in the more affluent regions of the South.
“Of more interest to large businesses will be the Chancellor’s announcement that the Government will set out a new approach to future revaluations and will consult on this before the next revaluation is due. A review of how business rates will be calculated to take into account the growing digital economy will also be watched with interest by businesses with a prominent online presence.”
On business rates too, Leigh Richardson, Senior Director at property adviser GVA in Bristol comments: “The Chancellor has simply not listened to the majority of business facing significant uplifts from the 2017 revaluation. Pre- Budget GVA laid out a strong case for the government to find £1.75 billion to help alleviate business concerns.
“This was principally through capping liability increases for all business to revert back to no higher 12.5%, rather than the current cap of 42%. However The Chancellor only committed to cut business rates by an additional £435 million through targeting small business, pubs and specialist hardship cases.
“Pre-Budget hype promised more from the Chancellor. He has not listened. For a tax system to impose on the worst affected a 42% increase in their liability and so clearly differentiate between small and all other businesses, is in our view inequitable.
“The devil will be in the detail as to the rules for distributing the hardship fund. However we have real concerns as to whether local authorities will fairly distribute the additional £300 million hardship relief fund. We simply don’t believe that relief in a tax system be based on those that shout loudest.”
On the pub trade, Paul Matthews, Head of Bruton Knowles’ Bristol Office said: “Landlords will be raising a glass to the chancellor following the government’s pledge to support pubs as part of today’s budget announcement.
“Although our economy appears to be much stronger, many pubs are either still suffering from previous years’ uncertainty, or as in many cases, have had to close their doors permanently.
“Government has pledged to offer a £1,000 discount to pubs with a rateable value of less than £100,000 to help protect pubs against increased business rates – which will be available to almost 90 per cent of pubs.
“We are pleased money has been set aside for this industry. It is encouraging government recognises the importance of pubs in the rural economy as they are often the hub of local villages and towns.”
Jenny Tragner, director at R&D tax credit consultancy ForrestBrown and member of HMRC’s R&D consultative committee, said: “Improving certainty and simplicity of R&D tax credit incentives is good news for businesses in the South West, as is the government’s commitment to improving awareness of the scheme among SMEs.
“However, we know that there is a chronic lack of awareness of R&D tax credits among smaller businesses, and previous measures to increase awareness and improve accessibility have not been fit for purpose.
“The Spring Budget appears to prioritise the needs of big business over those of SMEs and start-ups.
“Both the government and the wider tax industry have a significant role to play to educate businesses further; we know from experience that R&D tax credits are a real boost to the businesses in the South West that use them in furthering their innovation.”