It has been a busy few weeks since Chancellor Rishi Sunak delivered the Winter Budget, unveiling the Government’s tax and spending plans which set out proposals to support the UK’s economic recovery. As the media coverage moved on to Glasgow, we took the opportunity to ask Chamber members for their reactions to the announcements.
The Chancellor unveiled a number of plans to support business, including the extension of the recovery loan scheme for a further six months until the end of June 2022, as well as a temporary business rates relief for those in the retail, hospitality and leisure sectors. Education and Skills was high up on the agenda with £830 million extra funding for colleges in England for new equipment, £550 million to boost the National Skills Fund and an extra £1.6 billion to boost college funding for 16-19 education. It was good news for Liverpool businesses with the announcement that the City Region would benefit from £710 million for local transport projects. You can find details of all the announcements and how they might impact on your business in the excellent summary provided by the British Chambers of Commerce.
Heading into the budget, many businesses wanted to see specific plans to help the economy recover from the effects of Covid. David Hawley, Tax Partner at RSM, felt that the budget did focus on helping to restore the UK economy, but noted that there were still many businesses wondering when they might see further changes to core areas of tax such as income tax, capital gains tax and inheritance tax.
There were positive reactions to the announcement on business rates. Paul Trickett, Business Development Manager at Bathgate Business Finance noted that the cut was good news for the sectors who had been hit hardest during the pandemic. It marked a tax cut of £1.7 Billion, making it the biggest single tax cut to business rates in over 30 years.
Extra funding for transport in the City Region was generally welcomed by businesses and politicians alike. Dave Drury, Director at Mott Macdonald, welcomed the news as great for the transport sector and communities in the Liverpool City Region and noted that it will help companies like Mott MacDonald attract and retain talent. The expansion of T-levels was also good news for Mott Macdonald, as it will offer new educational opportunities and help close the skills gap, although it will take time to train and develop the right staff needed at apprentice and graduate level. They are focused on equipping the next generation with the skills the sector needs and they look forward to working with government and industry to achieve this.
There was good news also for Liverpool John Lennon Airport with the announcement that Air Passenger Duty for domestic flights will be cut in half. Robin Tudor, Head of PR at the Airport, welcomed the news which would bring improved connectivity for the City Region with future opportunities for domestic flights to destinations poorly served by rail. However, the caveat that the change will not come into effect until April 2023 is likely to be disappointing news for airports up and down the country.
The budget was expectedly light on Net Zero announcements as it preceded COP26 in Glasgow. Revd Dr Tony Bradley, Senior Lecturer in Business at Liverpool Hope University summarised it as recovering from Covid to enter into a sunnier economic upland – but not an especially green one.
Discussions in Glasgow went right up to the wire as negotiators worked through the final agreement. You can join us on Wednesday 9 October when we will be joined by Steve Rotheram for his experience of COP26 and the longer term impacts on the Liverpool City Region.