The chancellor's Budget plans to tackle coronavirus and fix the A303 near Stonehenge have been widely welcomed by business leaders in the West of England.
But some larger employers in the region have said proposals to suspend business rates for smaller companies are a “kick in the teeth” for bigger firms.
Chancellor Rishi Sunak unveiled his first Budget of the new majority Conservative government yesterday (March 11), including a raft of measures to deal with the coronavirus outbreak.
The plans include unlimited funds for the NHS; statutory sick pay for those who self-isolate even if they haven't got symptoms; sick notes through 111; allowing those on Contributory Employment and Support Allowance to claim from day one; temporarily removing the minimum income floor in Universal Credit; and relaxing the requirement to attend a job centre in person.
He also revealed that 14 days of sick pay for employees at small businesses hit by coronavirus will be refunded to the company.
The director of the CBI ’s South West branch, Deborah Fraser, says the plans are “bold” and will help businesses through tough times.
She said: “Covid19 will bring new challenges daily which will need to be resolved, at speed. [The] impressive economic response should now evolve with business insight to become as agile as our approach to public health.
“While the response to Covid19 is urgent, it is very good to see this Budget’s focus on innovation and infrastructure.” She added: “The Chancellor has set out some powerful incentives to get businesses investing.”
'Rishi Sunak’s proactive firepower will be very welcome'
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Phil Smith, managing director of chambers of commerce Business West, says the scale of the chancellor’s coronavirus response is “impressive”.
He said: “If the past few weeks has been about turning on the taps to wash our hands, here was the chancellor turning on the 海角视频’s fiscal taps to try and avoid the worst.
He added: “When many businesses are feeling worried about how to cope, Rishi Sunak’s proactive firepower will be very welcome.”
Mr Smith admitted that although some of the measures, such as freezing fuel and alcohol duty, are “populist, the spending is welcome, especially on infrastructure.
“Much of this is very sensible,” he added. “The 海角视频 has underspent on infrastructure for far too long – pursuing a penny wise, pound foolish strategy. With global borrowing so cheap it makes sense to increase our spending."
Tim Jones, chairman of South West Business Council (SWBC) and a board member of the Heart of the South West Local Enterprise Partnership , says the A303 improvement plan is the “major win” for the region.
He said: “We will secure £40billion of extra investment in life of that project. It’s a major step forward. We will be dusting down a lot of investment plans. This is a big boost for a lot of sectors, particularly tourism and leisure.”
'Kick in the teeth for big employers'
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However, some larger businesses in the South West say the chancellor's business rates announcement doesn't go far enough while others believe bigger firms have been overlooked.
“The fact that the chancellor keeps applying sticking plasters to the business rates system, this time in widespread reliefs to smaller businesses in the retail and leisure sectors, only serves to highlight the need for fundamental reform,” said Tim Davis, head of property company Cushman & Wakefield’s Bristol office.
“It will only provide a short-term impact on town centres and will do little to address the causes of the decline of the high street.”
Jon Webber, head of business rates at real estate company Colliers International agrees.
He said: “While helping SME’s is to be applauded, there is nothing in the Budget that tackles the issues of the larger businesses – and these are the ones shedding the jobs.
“Without helping larger businesses on business rates, the silent majority is side-lined yet again.”
'Vital Budget but very little detail'
Ian Brokenshire, senior partner for KPMG in Plymouth, says the raft of measures to help small businesses will be “vital” in supporting cashflow and liquidity in the South West business community.
Mr Brokenshire, said: “This was an essential Budget from a Chancellor on a war-footing providing short-term relief for the expected disruption from coronavirus.
“However, it was also a post-election government mapping out its blueprint for Britain’s future. Whilst the expected reduction of the limit for Entrepreneurs’ Relief from £10million to £1million will have disappointed some, the pensions relief changes will please others.
“The chancellor also set out plans to unleash the power of business particularly by investing substantially in ideas and R&D.
“Added to the announcements on housing and infrastructure it represented an eye-watering spending plan with little detail on how it is to be funded.”
The SWBC's Mr Jones agees. He said the region could benefit from other announcements around further and higher education, new hospitals, green businesses, R&D investment and the road programme aside from the A303, but said there was a "lack of detail" in the chancellor’s speech.
He added: “It’s an investment Budget, but let’s wait until we see the detail, there lies our future prosperity.”
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Mark Stacey, managing director of Portishead-based road and rail traffic safety manufacturer Crown International welcomed Mr Sunak’s announcements on the environment.
“We are particularly pleased that the Government is tackling the problem of Nitrous Oxide air pollution head on,” he said.
“It is to be hoped that this national funding will encourage more consistency, enabling quicker roll out of these essential new technologies across the country.”
Meanwhile, the largest housing association in the South West, LiveWest, which is set to build 7,000 homes across the region over the next five years, said it supported the government’s announcement on housing.
The government aims to build 340,000 home a year nationally until 2031 – including 145,000 affordable homes - with the South West needing 15,000 affordable homes built every year to keep pace with demand.
In a bid to increase access to affordable social housing, the government has given its Affordable Homes Programme a boost to the tune of £2billion.
LiveWest’s chief executive Paul Crawford, said: “With the average home in the South West costing more than 10 times the average salary, there is pressure on people to access housing at a price they can afford.
“We hope this will help to not just provide the volume of homes needed, but the right homes at the right price points to reflect the economic challenges that many people in the South West have in accessing housing.”
'More is needed to back the South West'
Tim Western, lead director at property consultancy JLL in Exeter said that whilst the Budget is a commitment to supporting businesses, more is needed to back the South West.
“While the Budget may not be as dramatic as some in government will have hoped, given the more pressing priorities around constraining and dealing with a coronavirus outbreak, it demonstrates a clear commitment to supporting business as the 海角视频 deals with its effects.”
He added: “It is vital we see infrastructure investment materialise in the South West too where it’s also much needed. This is particularly pertinent at the moment in Exeter and surrounding areas, which are feeling the impact of the collapse of Flybe .”
Karl Tucker, chair of the Heart of the South West Local Enterprise Partnership, says he supports the “fiscal boost”, but says the region needs to know where its share is on the government’s levelling-up agenda.
“We’ve been campaigning for the dualling of the A303 for years, so we’re delighted to get final commitment [however] what we need to see next is a holistic approach to our whole transport network that invests in rail resilience, wider road network resilience and addresses our recent loss of air connectivity with the collapse of Flybe,” he said.
He added: “We’re ready and willing to increase our contribution to 海角视频 plc – levelling up has always been key to our agenda and is central to our forthcoming Local Industrial Strategy which we believe is soon to be backed by government.”
Summary of support for businesses
- Launching a fundamental review of business rates that will report in the autumn
- A new pubs discount will be introduced to take £5,000 off the business rates bills of eligible pubs with a rateable value below £100,000.
- The Employment Allowance for Employer National Insurance Contributions is increasing from £3,000 to £4,000. Over half a million businesses will benefit from this reduction to their costs of employment, with an average gain of £850 per year.
- The Structures and Buildings Allowance for Corporation Tax will be increased from 2% to 3%, giving relief on an extra £100,000 next year if you’re buying a building worth £10million.
- £28million package and up to 10,000 Start-Up Loans to support entrepreneurs and businesses to start