Shropshire Live has collated the views of Shropshire’s business leaders following Chancellor Rishi Sunak today unveiling his spring budget, designed to help the economy recover from the effects of covid-19.
Dunne welcomes Budget to protect jobs and fire up economy
South Shropshire MP, Philip Dunne, has welcomed today’s Budget from Chancellor Rishi Sunak to protect jobs and deliver growth for businesses as the UK recovers from the covid19 pandemic.
Mr Dunne said: “The Chancellor has once again shown his willingness to innovate, and I am pleased there was so much for South Shropshire to welcome in today’s Budget. I had called for furlough to be extended until at least June, so I am pleased it has been further extended out to September, with additional support for the self-employed.
“As Chairman of the Environmental Audit Committee, I had called for policies to help the UK meet its environmental obligations. The major boost to business investment through a Super Deduction capital allowance for the next two years will help business invest in newer, cleaner, technology. While I welcome announcements to develop Freeports and growth hubs including hydrogen projects, limited investment in offshore wind port infrastructure and the lack of VAT reductions for green sectors to drive growth in areas such as energy efficiency represent a missed opportunity.
“On Green Finance measures, I had called for the Bank of England remit to be extended to reflect the transition to net zero Britain, which is very welcome. It must now set out before the COP26 summit the steps it will take to reduce the carbon footprint of its corporate bond portfolio. In addition to confirmation of Green Gilts to be issued, launch of environmental retail savings products will help develop the City of London’s leadership in carbon offset markets trading. The £12 billion investment in the new UK Infrastructure Bank to invest in public and private projects, will also help drive green growth and create green jobs.
“There is more that will be needed. But this overall package of support is good news for South Shropshire and the country as we seek to move from pandemic to recovery.”
“The stamp duty cut will be extended for another three months, before tapering for another three, to help reduce the cliff edge being faced in the housing market. A new mortgage guarantee scheme will help young people in Shropshire get onto the housing ladder with a 5% deposit.”
Shropshire Chamber of Commerce
Shropshire Chamber of Commerce today welcomed the Chancellor’s decision to extend the furlough scheme, describing it as a ‘huge sigh of relief’ for businesses across the county.
Richard Sheehan, the Chamber’s chief executive, said: “We have been lobbying hard for this kind of approach, and it shows that the Government has listened to the business community.
“For all of those Shropshire businesses which are currently still closed, or running with virtually no reserves as a result of Covid restrictions, this is going to give them a huge sigh of relief.
“The furlough scheme has been a lifeline to all sectors of the Shropshire economy, and to have abruptly turned off the tap would have risked undoing much of the good work over the past year.
“At Shropshire Chamber, we have been persistently calling on the Government for clarity, allowing companies to plan ahead as they start to rebuild – this Budget has certainly gone some way to help.”
Mr Sheehan added: “We realise that a time is going to come when business support will have to reduce, and the Government will need to step up strategies to recoup much of the money it has spent.
“But a gradual transition, tapering down the financial support rather than abruptly cutting it off, is definitely the way forward. Shropshire companies which have been worst hit by Covid are not going to be able to rebuild overnight – it’s going to take time.
“And that means that this certainly isn’t the time for an end to crucial lifelines such as Business Rates Relief or the Self-Employment Income Support Scheme.”
Mr Sheehan said the Government had also taken a sensible approach with its plans to raise Corporation Tax – by exempting companies with profits below £50,000 from the increase.
And he welcomed the extension of lower VAT rates for the hospitality industries. “This will make such a big difference in Shropshire, where the health of the tourism and leisure sector is so crucial.”
Telford & Wrekin Council Leader responds
“I welcome the huge amount of money the government is spending to support the economy and the additional further grants that will be offered to businesses.
“We have heard the headlines of the government’s Budget. The devil will be in the detail which we have still to see. We need to understand how these measures will be funded and how they will work for local businesses and organisations. Throughout the pandemic, Telford & Wrekin Council worked hard to distribute government grants to eligible businesses in the borough as quickly as possible and we will continue to do that.
“As a business winning business supporting council, we are proud of our record in reducing unemployment and youth unemployment. We stand ready to lead again in doing this but we need support from the government as a key partner in order to be able to make a difference locally.
“I am deeply disappointed that the government’s Budget has not provided any further money for adult social care, nor is there a reversal to the 21% cut to capital funding for the borough’s roads. There is no further money to support the safeguarding of children and there is no government grant to local authorities to freeze council tax. It means Telford & Wrekin Council’s budget for next year to be discussed at a meeting of the Full Council tomorrow (Thursday 4 March) will be asking residents to pay more to get less.
“I am deeply frustrated at the bureaucracy surrounding the New Towns Fund announced in today’s Budget. Telford & Wrekin Council put in a compelling case for a grant of £25million based on match funding of £110million. While bids from other areas were successful, we will work hard to understand the reasons behind the government’s not giving money to Telford and Wrekin. I am concerned that the match funding secured is now at risk we will hard to reassure investors who share our vision for the borough.
“Finally, I am disappointed that, in this Budget, the government has missed an opportunity to order a review into the Future Fit reorganisation of hospital services that would see the closure of Telford’s 24 hour A&E and consultant-led Women and Children’s Centre. This strategy needs to be reviewed for a post-pandemic world but it seems the Government is pressing on regardless.”
Post-pandemic support package welcomed
Marches Local Enterprise Partnership chair Mandy Thorn MBE said the post-pandemic support package unveiled by the Chancellor in his Budget would come as welcome news to many businesses across the region.
She said extra help for the tourism and hospitality sector – including Restart Grants of up to £18,000 per premises – and the extension of wider Covid support programmes such as the furlough scheme were much needed.
Mrs Thorn also welcomed additional help for the self-employed and companies planning to take on apprentices, as well as the extension of the business rates holiday and VAT reductions.
But she warned that tax increases which focused on businesses and entrepreneurs could stifle the recovery before it had begun.
“There are a number of measures of support for the business community which will be welcomed across Herefordshire, Shropshire and Telford & Wrekin today,” she said.
“The impact of the pandemic on our hospitality and tourism sectors has been particularly savage, and we are grateful that this has been recognised at least in part in today’s Budget.
“The 130 per cent ‘super deduction’ in tax for companies which invest in innovation also sounds promising.
“But some of the changes in the national tax structure announced today will also cause some concern amongst businesses. Increasing Corporation Tax – even with the exemption for companies making less than £50,000 and the full rate only kicking in on £250,000 profits – could have a dampening effect on the very things which drive economic growth.
“Our economy is fragile and we need to support small businesses, celebrate their successes and create the conditions for further growth and expansion, rather than increasing the amount we tax them on their profits.
“The Marches LEP has been working alongside our entire business community and our partners to draw up a recovery plan for this region and we are determined that this will seek to create the long-term conditions for a sustainable and prosperous future.
“It is in all our interests to find a longer-term fix to the UK’s national debt rather than burden businesses or individuals.”
Some jam today, but pain tomorrow…
Commenting on today’s budget Paul Brown, tax expert at WR Partners said: “It’s obviously great news for employers that the furlough scheme has been extended to the end of September.
“Another positive step is the extension of the self-employed income support scheme for a further three months from May onwards. The scheme is also extended to include those who started their self-employed businesses after 5 April 2019.
“While not actually announced before the Budget, the extension of the additional £20 per week increase to Universal Credit (now available until the end of September) did not come as a surprise to anyone, nor did the extension of the stamp duty holiday for homes of a value up to £500,000 in England and Northern Ireland which now runs until 30 June although the tapering of the holiday to apply to properties up to £250,000 to the end of September was a surprise.
“The Chancellor announced two measures aimed at raising more revenue to start to rebuild public finances. The first of these is a freezing of the income tax thresholds – although not as expected from next year. Instead the personal allowance will increase to £12,570 from April and the higher rate threshold to £50,270. However these levels will then be frozen until April 2026. This will inevitably push many more into higher tax bands as the recovery progresses.
“Other allowances will be similarly frozen – the capital gains tax annual exemption, the pensions lifetime allowance and the Inheritance Tax Ni Rate band (although in truth the latter has not moved in years!).
“Secondly the increase in corporation tax rates was also expected but again not in the terms it was announced. Instead of an immediate increase the rate will be increased to 25% from April 2023, although businesses with profits of less than £50k will still benefit from the current 19% rate. There will be tapering rates for those companies with profits between £50k and £250k.
“In addition, and to support HMRC’s compliance efforts generally but especially in respect of those who have taken illegitimate advantage of the various Coronavirus support schemes there will be an investment of £100 million in new resources for HMRC to investigate potentially fraudulent claims under the various schemes as well as other investments to further clamp down on tax avoidance and evasion.
“There was still room for a couple of measures which will bring a smile to the faces of some business owners. For the next two years companies will be able to carry back losses of up to £2 million to the preceding three years (currently there is an unlimited carry back but for one year only).
“For businesses that invest in assets qualifying for plant and machinery capital allowances there will also be a “super deduction” of 130% of the cost of those investments, again for the next two years. The super deduction for assets which only qualify for “special rate” allowances will be 50%.
“Doubtless the rules will not be as simple as the Chancellor may imply, but this remains a positive development. In other good news fuel and alcohol duties will both be frozen next year.
“In summary, Mr Sunak has taken care to taper out many of the support schemes that are currently in place to avoid a cliff edge as they end and while there are tax rises in our immediate future there is also a smattering of good news for many to soften those blows.
“I still expect another Budget in the Autumn when we may well see some more revenue raising measures, but in the meantime with the two tax raising measures pushed down the road into the future, the picture is definitely a lot rosier for taxpayers than it may have been.”
Warm welcome for extra apprenticeship funding
Telford College has welcomed the Government’s extension of the cash bonus scheme for hiring apprentices over the age of 25.
The financial incentives were first introduced in August, offering firms £2,000 to take on apprentices aged 16-24, or £1,500 for those aged 25 or over.
Now, that figure is set to rise to £3,000 in April – regardless of an apprentice’s age – with the scheme extended by six months.
Graham Guest, principal and chief executive of Telford College, said: “This is great news. It means the actual amount that some employers could now receive for hiring an apprentice has risen to £4,000.
“That’s because there is also an additional £1,000 available for companies taking on new apprentices aged 16-18, or those under 25 with an Education, Health and Care Plan. For small businesses in particular, this is a particularly attractive package.”
Telford College also welcomed news of the chancellor’s new ‘flexi-job’ apprenticeship. Under the plans, individuals can choose to be linked to an agency, instead of a single employer, allowing them to take on different jobs with multiple businesses in one sector.
More businesses encouraged to take on apprentices
The Managing Director of a Shropshire construction firm Pave Aways has also welcomed new measures to encourage more businesses to take on apprentices.
Steven Owen from Knockin based Pave Aways, which last year won Shropshire Chamber’s Education and Training award for the firm’s commitment to encouraging young people into construction, said the increased cash incentives for employers announced by the Chancellor Rishi Sunak could be the encouragement smaller businesses needed to take on an apprentice.
“It can be hard and seem like a big commitment for businesses to take on apprentices but we know that it can make a real difference towards building a more sustainable workforce for the future. At a time when finances may be tighter, additional funding could mean the difference between a business taking on an apprentice or not,” he said.
Steven also welcomed the idea of more flexible apprenticeships particularly in a bid to attract older apprentices to the sector.
“Construction in particular is an industry where it would be easy for businesses to work together to offer a flexible apprenticeship scheme. There are a lot of smaller companies that we use that could benefit from having an apprentice but they aren’t able to offer them the full training required. A flexible apprentice scheme could have real rewards in this case.
“Increasing the age limit is another positive move as it means that those people who want to start again at a later age can do so on a living wage,” he added.
Tourism and hospitality measures will help businesses hardest hit
New Marches Growth Hub chair Dave Courteen welcomed many of the measures announced by the Chancellor to help businesses recover from the impact of Covid.
He said a £5billion package of support for the hospitality and tourism industries – as well as the extension of VAT and business rate support – would help some of the businesses across the Marches hardest hit by the pandemic.
Dave, whose company runs the highly successful Shrewsbury Club and Holmer Park Spa and Health Club near Hereford, also welcomed news that the Chancellor will pay out a fourth and fifth round of grants for self-employed workers and extend the furlough scheme as well as increasing incentives for companies looking to take on apprentices.
“The Chancellor is clearly doing much in this Budget to support businesses hardest hit over the last 12 months and that has to be welcomed. Of course, we will need to study some of the detail announced today to see just how far this Budget addresses all the key issues.
“There is much to be done to encourage and support new start-ups in the coming months as well as building our skills and training offering so that it can match the best in the world.
“What is really crucial is that no sector of business is allowed to slip through the net because support was not available when needed.
“The Marches Growth Hub will continue to work with all our partners – and all the terrific businesses which drive the economy across Herefordshire, Shropshire and Telford & Wrekin – to ensure our expert support and advice is available to all.”
SDLT holiday extension is good and bad news
Commenting in response to the Chancellor’s confirmation that the SDLT holiday would be extended until the end of June and then tapered thereafter not returning until its pre-pandemic levels until October, Jarna Rahman Head of FBC Manby Bowdler’s Conveyancing department said:
“The extension of the SDLT holiday to the end of June is both good and bad news. Whilst there are many purchasers eager to complete ahead of the current March 31 deadline for whom this will provide some breathing space, it does continue to place immense pressure on conveyancing teams who are already under significant strain. However, the tapering that has been announced which means the £125k threshold won’t be reintroduced until October, may go some way to mitigating that strain.
“Separately, the reintroduction of 95% mortgages should be welcomed. These will both encourage new buyers into the market, as well as making mortgages more affordable as the economy recovers from the Covid pandemic.”
Green jobs drive welcomed – but needs to go further
Green energy pioneer AceOn today welcomed the focus on a new Green Revolution in the Budget – but called for Chancellor Rishi Sunak to be even more ambitious.
AceOn Energy managing director Richard Partington said both solar and battery technology would play a massive part in the building of a truly sustainable economy.
“We are delighted that the Chancellor talks so enthusiastically about the new Green Revolution and are committed to playing our part in bringing it about.
“We are developing incredibly efficient and smart batteries which can help store renewable solar energy in a way we could never imagine a few years ago. They will help slash our emissions, cut fuel bills and lift entire communities out of fuel poverty.
“For its part, The Government should make incentives available to consumers and developers to switch to energy storage in the way they have for other technologies. That would demonstrate just how seriously they are taking the issue.
“We are also disappointed that our call – along with many others in our industry – for VAT rates on home energy storage to be lowered to 5%, in line with domestically used electricity from fossil fuels, appears to have been ignored.”
Budget will be broadly welcomed by most small businesses
Telford-based Bridge Cheese, which supplies dairy products to the food manufacturing and foodservice sectors, is one company which could benefit from the new Super Deductions announcement. But managing director Michael Harte said more detail was needed on what R&D would be eligible for the new 130% tax relief.
“This was a Budget which probably predicted more pain down the road but it will undoubtedly be broadly welcomed by most small businesses, which include many of our customers in the high street and their suppliers.
“I’ll be interested to understand the detail around the super deduction tax relief for manufacturers who invest. Few will be planning major cash splurges on big investments this year while the wider economy recovers over the pandemic and issues remain with the existing trade agreement with the EU.”
“However, we are a sector business which is looking to grow this year and are planning to expand our facility in Telford. So we will be keen to see if that investment will have additional benefits for Bridge Cheese with these new announcements.”
“We were very pleased to hear that supporting businesses and jobs was top of the shop in the budget, and that key initiatives introduced last year to help companies through the pandemic will be here to stay for a few more months – like the extension to the furlough scheme, and the VAT cut.”
“We also welcomed the news that corporation tax changes will be delayed and new increases to tax on profits will be tapered. As a medium-sized business which is scaling rapidly, it’s important that we are allowed to develop and expand our operations without being punished with a big tax bill for being agile and adapting to the hostile trading conditions caused by COVID and the UK’s EU exit.”
Help to Grow scheme could be a game-changer
The Help to Grow scheme to improve productivity through funded support for digital solutions could be a game-changer for many businesses, according to web tech expert Shaun Carvill.
Mr Carvill, Managing Director of West Midlands-based Clickingmad, said the pandemic had forced many small businesses to move their services and products online and adopt digital technologies earlier than planned.
“Any support which can be provided to smaller businesses to enable them to keep up with this radical and irreversible digital shift is welcome news and we’re certain many business owners across our region will benefit from this new scheme. It could be a game-changer for a generation of enterprises,” he said.
Proposals to provide funding to the tune of £5billion to support the recovery of local high streets following the Covid pandemic was also welcomed by Mr Carvill.
“It is absolutely vital that we get our town centre businesses up and running as soon as it’s safe to do so and this funding will hopefully help to soften the enormous financial strain which many high street businesses have faced.
“Our Shropshire office is located in the heart of Bridgnorth, a usually busy, vibrant, market town, but the pandemic has turned it into a ghost town. It’s been so sad to see local coffee shops and non-essential shops closed for so long whilst we fight against this terrible pandemic. They need all the support they can to get back on their feet quickly and these restart grants will hopefully play a big part in getting our towns moving again.
“It will be essential however for the Government and local councils to ensure these grants are accessible easily and speedily to avoid any further financial burden.”
Furlough scheme extension welcomed
UK outdoor education charity the Field Studies Council, which is headquartered in Shropshire, today welcomed the Chancellor’s move to extend the government furlough scheme.
The charity, which placed a large percentage of its workforce on furlough last March when the government put a stop to all school residential trips, says the scheme has enabled it to retain its highly skilled and specialised workforce throughout the pandemic.
Mark Castle, the charity’s Chief Executive, said: “Our core business relies on being able to provide day and residential trips for schools but our doors have been shut for the best part of a year. The furlough scheme has provided us with some breathing space throughout this particularly challenging time and has enabled us to retain our highly specialised workforce.
“As we have not yet been given the green light on when school trips, even day trips, may be able to resume, we very much welcome the latest extension to the scheme. When we get the go ahead to start operating again, this puts us in a very strong position to be able to support teachers and pupils and play, what we believe, will be a vital role in the nationwide schools catch up programme.”
Charity welcomes commitment to boost training and skills
Supported employment and training charity Landau, which is headquartered in Telford and has sites in Stoke and Hereford, today welcomed the Chancellor’s multi-million-pound commitment to boost training and skills to tackle youth unemployment.
Sonia Roberts, CEO, said: “Younger members of our society have been some of the hardest hit by the pandemic in terms of job losses or even the ability to get started on a career trajectory. We’re pleased the Chancellor has recognised this in today’s announcement and there will be a focus and funding to support apprenticeships and training.
“The Government’s commitment to support lifetime training and skills is also extremely good news. Despite huge efforts to protect jobs throughout the crisis, many people still face the prospect of redundancy as a result of the longer-term impact of the pandemic. The Government must now remain true to its word and make sure funding is in place so that people can retrain and get the skills they need to enable them to access new employment opportunities in the future. Unfortunately for many, the toughest times may still be to come.”