What the budget means for you

Jessica Merson has recently set up her own business
Jessica Merson has recently set up her own business
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The budget for 2013 has now been set.

Now that the key points have been discussed and digested, the Telegraph has collected some views from Northamptonshire’s business community, including the county business chamber and Jessica Merson of Wellingborough, who has recently set up her own accountancy practice.

Take a look at their views below and see us your comments if you’d like to have your say on this year’s budget.

Send your views to nt.newsdesk@northantsnews.co.uk.

Paul Griffiths, chief executive of Northamptonshire Chamber, has studied the measures announced in the budget on Wednesday.

He said: “Northamptonshire Chamber of Commerce realises that the Chancellor of the Exchequer faced a difficult task in the budget, given the need to maintain fiscal discipline while attempting to shift resource towards growth.

“The chamber was pleased to see a number of positive measures that local businesses will cheer.

“For smaller companies in particular, the new (and automatic) £2,000 employer National Insurance Contributions (NICs) reduction, the cancellation of the fuel duty rise, and the British Chambers of Commerce (BCC) proposed Growth Vouchers scheme will stand out.

“For all companies, swifter reductions in Corporation Tax (falling to 20 per cent in 2015) feature strongly, as do improved incentives for investment and R&D.

“The chamber is also pleased that the Chancellor heeded the accredited Chamber network’s call to re-prioritise expenditure, up to a point.

“The moving of £15 billion from current to capital spending is good news, although this only kicks in during 2015-16 – the start of the next Parliament.

“There was no immediate shift towards road maintenance or house building, both of which could have boosted construction and business confidence quickly.

“Also, there was no large-scale action to boost business access to finance.

“While the budget was more pro-business than it has been for a few years, the chancellor neglected to even mention the big issue of business rates or offer incentives or further support to help businesses to export.

“Northamptonshire Chamber is also concerned that many of the measures announced do not come into force until 2015, which is just too far away. Businesses, and our economy, need help urgently.”

Here are some further views from Northamptonshire Chamber on specific measures announced in the budget.

On fiscal policy and Government spending:

The chancellor has tried hard to shift spending towards growth, with some success. However, the Coalition as a whole should have taken the tough political decision to remove ring-fences around health, overseas aid and universal benefits, which would have allowed more immediate investment in road maintenance, house building, business access to finance and support for exporters.

The Northamptonshire business community will welcome the chancellor’s move to re-direct money from government departments to infrastructure over the medium term.

However, businesses would have liked to see an even bigger shift in Government spending towards priorities that unleash enterprise, which in turn delivers jobs, prosperity and the tax revenues needed to shrink the deficit and eventually the national debt.

On ‘monetary activism’ and a new remit for the Bank of England’s Monetary Policy Committee:

Northamptonshire Chamber welcomed the chancellor’s decision to review the Monetary Policy Committee’s remit, and to give it more latitude to support growth.

In conjunction with our colleagues in the accredited Chamber network, we will look at the tweaked remit in detail, but the principle of targeting inflation while doing everything possible to support growth is, we believe, right.

On business rates:

Companies across the county (and country) are crying out for relief from relentless annual rises in business rates for years, but the Treasury has put off action until the Autumn Statement.

Unless a company’s premises are the size of a double garage, or if a firm is building speculatively over the next two years, there’s little relief on offer.

Heavy taxes on inputs like property drag down business profitability. We urge the Chancellor to take further action on business rates without delay.

On employment and the new Employment Allowance:

The chancellor’s move to help our smallest companies take on staff by cutting their employers’ National Insurance bills by £2,000 will give many local businesses an important boost of confidence.

Small companies should be able to focus on growth rather than worry about getting hit by employment taxes.

On Growth Vouchers:

The British Chambers of Commerce (BCC), supported by the rest of the accredited Chamber network which includes Northamptonshire Chamber, proposed a voucher scheme to help businesses access growth advice in September 2012.

We are pleased that the Chancellor has accepted our proposal and committed £30 million to help companies around the country get the advice they need to grow, on their own terms. Northamptonshire Chamber of Commerce, along with Chambers of Commerce around the country, look forward to working with the Government to bring the scheme to life and enable businesses to get the specialist assistance they need, whether on finance, employment law, or other areas.

On business access to finance:

Business bank:

BCC has long campaigned for the establishment of a business bank and for it to be of sufficient size and scale to provide the sort of support to new and growing businesses seen in Canada, the USA, Korea, and Germany. A British Business Bank requires a vision and proper resourcing. Unless it has both, it can’t back the dynamic companies that have failed to get patient growth capital in this country for decades.

While the Accredited Chamber Network will await further detail on the Business Bank’s start-up activities, we would have liked to have seen a radical increase in the initial funding on offer.

The chancellor has, however, given greater flexibility to the Bank of England to support growth.

So, via BCC, we will urge the incoming governor of the Bank of England (BoE) to underwrite or capitalise the business bank using the BoE balance sheet.

Funding for Lending

The chancellor mentioned that the Treasury is working on improvements to the Funding for Lending scheme, which has helped the mortgage market but has done little or nothing to solve the issues businesses face when trying to access finance.

While we will support any idea that could help boost the scheme’s effectiveness for business lending, Funding for Lending can ultimately do little beyond lowering the cost of finance for companies already considered by banks to be ‘safe bets’.

Only greater competition in the banking sector and a properly capitalised Business Bank, which would drive up appetite for risk, can deal with the very real frustrations we see in the business community.

On housing and the mortgage market:

The chancellor’s efforts to grease the wheels of the mortgage market are significant and positive.

However, we suggest that moves in the mortgage market should be complemented by direct support for the building of new houses. Direct support for construction creates jobs and supply chain activity, and rapidly boosts business confidence.

On transport infrastructure:

Business appreciates the chancellor’s commitment to improving Britain’s transport infrastructure and his efforts to reverse the damaging cuts to transport spending that the accredited Chamber network warned all parties against.

His £18 billon shift from current spending to capital investment over the next Parliament is welcome. However, by its very nature, the switch announced in the budget will only have an impact in the medium-term.

As part of a wider re-prioritisation of resources on measures to boost confidence, jobs and growth, the chancellor should have gone even further and used this budget to divert unproductive current spending into road maintenance and repairs today.

This would have had immediate effects on business confidence, construction sector jobs, and the effectiveness of our transport network.

On international trade and export support:

While we welcomed the chancellor’s commitment of new funds to support trade promotion in the Autumn Statement, and are working closely with the Government locally to boost assistance to exporters, more can still be done to turbo-charge export support for Northamptonshire companies.

There is a need to provide even more practical help in overseas markets for companies wanting to export.

On corporation tax:

All companies will cheer the news that Corporation Tax will fall to 20 per cent by 2015.

This is an important boost to business confidence.

The chancellor may, in future, need to consider even further tax cuts of this nature if there is no sign of resurgent growth over the coming months.

Also from the business community in Northamptonshire is Jessica Merson, who has recently launched her own company J Merson Accountancy Ltd.

Here are her views on Wednesday’s budget:

It is often said that the SMEs (small and medium enterprises) are the lifeblood of our society.

Does this mean that the 2013 budget will be beneficial to the five million SMEs in the UK?

Key Factors affecting SMEs in the budget 2013:

– Employment Allowance – taking £2,000 off the Employer National Insurance bill of every company from April 2014

– The main rate of Corporation Tax will come down to 20 per cent in 2015 and the marginal rate relief will be abolished

– Removal of stamp duty on share transactions in growth markets such as AIM

– The fuel escalator has been scrapped

– Growth Vouchers for Businesses

What does this really mean for the SME in times where the growth forecasts are slowing and unemployment and inflation are rising marginally?

– The Employment Allowance is a win, however there may be more beneficial schemes such as the national insurance break that would bring benefits instantaneously rather than from next year

– There are very few SMEs that earn profits above the threshold of £300,000 and the reduction in Corporation Tax rate will really only benefit larger corporations. Is it fair that the smallest businesses with profits of less than £300,000 are paying the same rate of corporation tax as a company with profits in the millions?

– There is only a small proportion of SMEs listed on the AIM market, and this tax cut is unlikely to directly benefit this group as a whole

– The scrapping of the fuel escalator is a win for those companies whose business costs include fuel for vehicles

– Growth vouchers could benefit start-ups with some access to set-up services, however there was no detail on how or what benefit these will bring

Overall, it appears that the budget 2013 offers very little change to the lifeblood of our society.

For more information about J Merson Accountancy Ltd visit the website at www.jmacc.co.uk.