Budget 2018: Bristol business reaction

October 29, 2018
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Business West director of policy Matt Griffith described the Budget as pro-business in which the Chancellor “reaffirmed his commitment to providing stimuli in the right places”.

“Businesses will welcome the Chancellor’s commitment to housing, particularly with the Housing Infrastructure Fund,” said Mr Griffith, pictured. 

“The spiralling cost of housing makes it tougher for businesses to attract the skilled workers they need to live and work in the West of England, so making extra funding available for regeneration projects is a step in the right direction.

“As far as the so-called ‘tech tax’ is concerned, it is a welcome starting point that will help to address imbalances between physical and online trade as well as cracking down on firms avoiding tax on revenue earned in the UK. Aimed at companies with over £500m annual revenue, it shouldn’t affect the smaller tech players, of which there are many in Bristol and Bath.”

Independent high street retailers would breathe a sigh of relief that their business rates pressures have been eased, said Mr Griffith.

“Nevertheless, the future of the high street remains uncertain and I hope that the extra support made available by the Chancellor is the first of many initiatives to help boost our town and city centres.

“However, we should be cautious about any sweeping reforms of planning regulations that makes it easier to switch retail into residential, as this could undermine the supply of total employment space, which is already under strain.”

On transport there was welcome news on roads and potholes, said Mr Griffith, but he added that it was too early to say whether the squeeze on the overall transport fund would continue.

“Effective transport requires investment in public transport, particularly for commuters. We have been calling, along with our colleagues at London and Manchester Chambers of Commerce, for higher levels of longer-term investment in this vital form of business infrastructure,” he said.

Elsewhere in the speech there were a raft of new measures for businesses to be pleased about. The reduction in the apprenticeship levy from 10% to 5% would be good news for those small firms needing to take on an apprentice, while the mentoring allowance, start-up fund and an increase in the Annual Investment Allowance for the next two years were all positive moves too.

However, the ultimately test was still to come if investment and growth potential were to be achieved, he said.

“We need a Brexit deal that secures frictionless trade and a close relationship with our largest market, and the true test of this Budget will therefore be in the coming months, when Parliament votes on a final deal.” 

Institute of Directors South West regional chair Nick Sturge, pictured said the Chancellor showed he had listened to business leaders with key reforms on business rates, the Apprenticeship Levy and the Annual Investment Allowance.

“Unaffordable business rates have hampered local high streets at a time when they need all the help they can get to compete against larger and, more importantly, online retailers,” he said.

“But this is ultimately a stop-gap measure at a time when the business rates system requires much wider reform. Support must also be extended to small firms outside the retail sector, and the fact that the tax also acts as a clear disincentive for businesses to invest in improving their properties must also be addressed.”

Raising the Annual Investment Allowance cap to £1m – the tax incentive offered to businesses to encourage capital investment in which they can deduct a percentage of capital costs – was something the IoD had been calling for for several years.

Nick said it should bring some much-needed confidence for firms to make plans to boost their productivity.

“I would, however, have liked to see more incentives for small business to adopt the technology they need to drive up their performance,” he added.

“And I disappointed by the pronouncements on Brexit: its shadow continues to fall heavily over business and the government needs to prioritise support for business to get ready now – not simply announce a potential ‘no deal Brexit Budget’.”

West businesses had prioritised a freeze or cut to business rates and an increase in investment in transport infrastructure in a pre-Budget survey by Lloyds Bank Commercial Banking.

“So they will broadly welcome the measures to address those issues that the Chancellor announced,” said Adam Rainey, the bank’s regional director, pictured.

“The pledge to slash business rates for independent retailers could prove to be a lifeline for many stores in the region’s high streets, helping create a better environment for business growth and freeing up cash to invest in new opportunities,” he added.

The pre-Budget survey had also showed that West firms wanted continued investment in infrastructure. The extra funding allocated for this was a step in the right direction to help improve connectivity across the region, particularly for rural communities, said Mr Rainey. 

The Federation of Small Businesses (FSB) branch that covers Bath said the city’s small and medium-sized firms received plenty of good news in the Budget. 

The Chancellor had listened to the FSB and others and put a “real focus” on supporting the high street independent sector, according to FSB Gloucestershire, Bristol and Bath development manager Sam Holliday, pictured.

“We very much welcome the decision to cut business rates by a third for the vast majority of our SME retailers. This will mean genuine discounts for the next two years for many of our high street stores, which can only help in their determined battle to ensure we have the vibrant town centres our communities need.    

“Elsewhere we also welcome the decision not to increase small business cost such as the freezing of the current VAT threshold for two years and the protection of the Employment Allowance. Both of these potential cost-saving measures will mean that small firms will have more support to help with the ever-rising costs of doing business.”

He pointed to other measures including increased support for small builders, the freezing of the fuel duty and the commitment to more investment in infrastructure, apprenticeship support and technology. “This would seem, overall, to be a Budget which can be seen as genuinely pro-small business,” he added.

 

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