Cumbria Chamber’s initial budget response
As ever the Chancellor’s statement today and the announcements leading up to it are only part of the story. There’s a weighty document to be pored through in detail to get the full picture of what the announcements are in detail, and there may be others within it besides.
So, here is Cumbria Chamber’s initial response to the 2021 Budget, with a more detailed and considered view to follow later in the week:
Business Rates
It’s great to see some action, at long last on business rates. Although we didn’t get a mention in the statement this is something Chambers have been pushing hard on for some years. Revaluations every 3 years from 2023 will mean more realistic valuations, 12 months improvements relief and investment relief on green technology are good news. And the 50% discount up to £110k for retail, hospitality and leisure is of course good news, as is cancellation of the planned increase in the multiplier. But this isn’t the fundamental overhaul that we and others have been calling for and further action to reform the rates system is needed.
Fuel Duty
Cancellation, for at least another year, of the planned fuel duty increase is clearly good news. This is particularly so given current fuel prices.
Skills and Education
Investment in skills and education is always welcome, and is much needed. We need to check the detail and this and confirm what is genuinely new. And while these measures are welcome they take time, particularly in the case of education, to convert into actual skills in the workplace.
National Minimum Wage increase to £9.50/hour
While we all want to see everyone earning a decent wage the timing of this increase has to be questioned when businesses are under such pressure already from cost increases and the impact of Covid.
Levelling Up
It was disappointing not to see more about levelling up in real terms and benefitting businesses here in Cumbria. Hopefully there is more hidden in the detail. While city regions are set to benefit from transport improvements what help will there be for businesses in the county? Not least those in hospitality struggling to find ways to get staff to their premises.
Business taxation
There is some good news here such as the extension of R&D tax reliefs to include cloud computing and data costs and extension of the £1m annual investment allowance limit to March 2023.
Staffing, Growth and Productivity
We were hoping to see real support to help businesses, and especially SMEs, invest in growth and productivity and address staffing issues. This isn’t clear in the announcements and is particularly vital at a time when businesses are under tremendous pressure from staff shortages, spiralling costs, transport issues and supply chain challenges – and many are still recovering from the disruptions of Covid and paying back Covid debt. The current challenges are too big for businesses to tackle alone. While it’s great to see the announcements of spend on house building and so on, there is the concern as to where the builders will come from to do this.
While investments in education and training should go some way to helping, this does take time. And fundamentally there just aren’t enough people to do all the jobs that need filling, now and moving forward.
There appears to be a concerning view in government that higher wages will lead to improvements in productivity and growth. What’s in fact needed is investment in productivity and growth, which then feeds through to higher wages.
If you have any views on the budget announcements please let us know at info@cumbriachamber.co.uk.
© Cumbria Chamber of Commerce