The centrepiece of the summer budget 2015 – a fresh round of public sector spending cuts – was no surprise as the government aims to get unpopular measures out of the way early.
Nonetheless, businesses will be buoyed by news that the UK had the fastest growth of the G7 major economies last year as the economy expanded by 3 per cent.
It should also be kept in mind that the economy has improved over the last five years, despite austerity measures, so another five years of a strict economy should not damage businesses, although it will reduce demand as people spend less.
Closing the skills gap
The apprenticeship levy on large firms should help to close the skills gap. Put simply, if businesses employ apprentices, they can recover the investment.
In principle the chancellor’s intention to create another three million new apprenticeships is welcome news, especially for Lancashire manufacturing and engineering firms faced with skills shortages.
However, every recent budget has contained plans for apprenticeships and much hinges on how they are implemented. A lot will depend on the type of apprenticeship scheme, rate of pay and whether employment is guaranteed. Apprentices can certainly help to tackle the skills gap. However, a more general improvement in the economy is needed to help firms narrow the shortage by taking on all types of employees.
Elected mayors and local authorities will be given devolved powers to relax laws on Sunday trading hours.
The relaxation of the Sunday trading restrictions during the Olympics was significant enough to make it sensible to roll out nationwide – and permanently.
Sunday has not been a special, ‘no shopping’ day for many years, and as long as there are rules to prevent the exploitation of workers, the decision should be applauded.
Consumer habits have changed and this is reflected in online shopping figures where consumers can shop 24/7. Currently large stores can only open for six hours a day on Sundays. Local powers to extend these opening hours could boost business as well as local authority coffers through greater opportunity to levy rent and rates.
The increase in online shopping means consumers want to shop at weekends currently large stores can only open for six hours a day. Local powers to extend these opening hours would boost business as well as local authority coffers through greater opportunity to levy rent and rates
Tax announcements are good for business
The chancellor’s declaration that “Britain is open for business” was underlined by his announcement of a new 19 per cent rate of corporation tax in 2017, followed by an 18 per cent rate in 2020.
This is excellent news for regional businesses looking to stay competitive, while improving their bottom line.
Another heartening aspect of the budget is that the chancellor delivered on his election pledges not to hike income tax, VAT or national insurance, which can only be good news for business.
A national living wage – £7.20 an hour from next April, rising to £9 in 2020 – will mean extra costs for businesses, although small firms will welcome a reduction in their NI contributions.
Small and medium sized businesses should be encouraged by the announcement that the annual investment allowance for SMEs will be permanently doubled in a bid to incentivise investment.
The allowance currently stands at £100,000, and the new £200,000 allowance is particularly good news for Lancashire’s manufacturers and agricultural businesses.
The government has announced it is now inviting bids for a new round of enterprise zones with a focus on smaller towns.
Existing zones, which aim to stimulate local economies by encouraging investment and business growth, have created more than 15,000 jobs across England since being introduced in 2012.
Town and districts which work in cohesion with local enterprise partnerships to develop bids will be the most successful.