Budget described as a ‘missed opportunity’ by Chesterfield business leaders

Business leaders in north east Derbyshire have described Chancellor Philip Hammond’s first budget as a ‘missed opportunity’ and ‘short-term measures for long-term problems’.

“The Chancellor missed out addressing areas that are key concerns for the local population. There was nothing about housing, Buy to Let or Brexit in the budget. In particular there was nothing about improving imports and allaying the concerns of the local business community. It was a disappointing budget. Where money has been allocated it’s not enough and a very short-term measure,” said Dominic Staniforth, Audit Partner of BHP, Chartered Accountants.

Kevin Hanlon, Director of Finance and Resources, Chesterfield Council, said: “The Chancellor highlighted the good news around the strengths in the economy, more jobs having been created, a decrease in unemployment and higher than expected growth for the economy, the budget makes it very clear that we are still facing continued austerity and this will impact public sector budgets/services and families.”

David Pearson, Director of Partnerships and Membership Services, East Midlands Chamber (Derbyshire, Nottinghamshire, Leicestershire) agreed, adding: “The emphasis of the Budget was about stability and not spending money in order to create long-term prosperity for young people. The Chancellor gave out little bits to schools, pubs and families to tick the right boxes.”

Steve Taylor, Director, Start Financial Planning, welcomed the Chancellor’s tame budget, saying: “It was a very safe budget and I am particularly relieved that there were no further announcements on pension changes.”

Comment on the key points

Social Care and NHS

• 2bn over the next three years for England
• Green paper on social care funding to be published later this year
• £325m of capital for the first of the new sustainability and transformation plans (STPs), intended to improve healthcare
• £100m for 100 onsite GP treatment centres in A&Es in England

“The £2bn the Chancellor pledged for social care is very welcome however I suspect it won’t be enough. It plugs a short-term gap. We will have to await the green paper to address the long-term challenges facing social care and the relationships with health.”  Kevin Hanlon, Director, Financial Resources, Chesterfield Borough Council

Savers

• The promised NS&I three-year bond paying 2.2% will be available from April on savings up to £3,000.

“The new NS&I 3 year Fixed Rate Bond paying 2.2% interest on £3,000 savings is not as competitive as it was made out to be in the Autumn Statement but the increase of the ISA allowance to £20,000 on 6 April should help savers. However, with personal debt now standing at £1.5 trillion, will some people have the money to save? The NS&I Bond feels like the government is simply ticking a box for savers to appease them.” Steve Taylor, Director, Start Financial Planning

Tax-free dividend allowance

• Cut from £5,000 to £2,000 from April 2018

“A lot of people set up their own business because they want to be entrepreneurial. The further drop in the dividend allowance from £5,000 to £2,000 is penalising small business owners. This is a big U turn on the dividend tax announced at the last Budget. It feels like the government didn’t think it through when they first announced it.” Chris Humphreys, Tax Partner, BHP, Chartered Accountants

Self-employment

• Treasury to raise £145m from increasing national insurance contributions of some self-employed people

“The self-employed have definitely been hit hardest in this budget with the increase in national insurance and decrease in dividend allowances. The Chancellor himself acknowledge that entrepreneurs and innovators are the lifeblood of the economy, yet he seems to have penalised them.” Glenn Jaques, Employment Solicitor, BRM Solicitors

Business rates

• A cap so rates rise by no more than £50 a month for small businesses losing their rate relief
• pubs to get a £1,000 discount on business rates of less than £100,000 rateable value
• £300m fund for discretionary relief for local authorities

“The £300m fund for discretionary business rate relief will be welcome news to small businesses that may have been hit by business rate increases. Councils will be able to help some businesses with the fund. However, is it enough and does it address regional differences in business rate increases/decreases? We will have to see the detail to see what the benefits will be. It is a short-term solution and the fundamental reforms business want will happen some time before the next revaluations,” Kevin Hanlon, Director, Financial Resources, Chesterfield Borough Council

Education

• Introduction of T-levels – technical qualifications, an alternative to A-levels – for 16 to 19-year-olds
• Funding of £320m for 110 new free schools to take the total to 500
• Free school transport extended to children receiving free school meals at selective schools
• £216m invested in school maintenance

“The Chancellor announced spending that will make a real difference to education and young people, particularly the introduction of T Levels and the accompanying high quality three-month work placements for every technical student. Is the infrastructure in place to deliver this? There, is already a reluctance amongst companies to provide work experience as it is disruptive to business and can the education system cope with yet another change?” David Pearson, Director of Partnerships and Membership Services, East Midlands Chamber.