Conservative MPs in South Cheshire have welcomed today’s Budget – but CEC and business leaders say it does not go far enough to help the post-pandemic recovery.
Chancellor Rishi Sunak MP unveiled is eagerly-awaited Budget today as many families and businesses look for help to bounce back from the Covid lockdown of the past 12 months.
Key headlines include not raising income tax or NI contributions, but freezing allowances between 2022 and 2026.
There will be no rise in fuel duty, alcohol duty or VAT.
But larger businesses will face a rise in Corporation Tax, currently 19%, up to 25% from 2023.
The current Furlough scheme has been extended until September and there are new Self-Employed grants to include those with only 2019-20 returns.
The Business rate holiday has been extended, and there will be mortgage guarantees to help people buy on a 5% deposit.
Dr Kieran Mullan, Crewe and Nantwich MP, said: “We are going to carry on supporting jobs and businesses and protect people’s livelihoods.
“We are going to help people get back on their feet. We are sticking to our manifesto pledges and not raising income taxes to help people and families keep more of the money they earn.
“The tax rises we have set out are targeted at the very biggest and most profitable businesses because we know smaller businesses need to help us get our economy back on track.”
Eddisbury MP Edward Timpson added: “Today’s Budget provides businesses and families in Cheshire with the support and reassurance they need to get through the pandemic.
“With £407 billion of support for families, jobs and businesses, it is right that the Chancellor is honest with Eddisbury residents about our public finances.”
But Cheshire East Council Leader Cllr Sam Corcoran said the Government had ducked the social care issue.
“There’s no real roadmap out of this. There’s no job creation scheme when furlough ends,” he said.
“There’s no green [agenda] — one scheme I would have liked to have seen is retrofitting houses with insulation but that’s not there. There was a mention of green bonds but that is… a rebadging.
“There are many things not here. There’s nothing to address the overwhelming issues of climate change or social care. The government has been promising a white paper on social care and there’s nothing there.
“The government’s solution has been to allow councils to put up tax by three per cent [via the social care precept] so we have been forced to do that — the government has ducked the issue.”
Cheshire East Conservative opposition leader Cllr Janet Clowes said: “Social care was addressed at the December settlement budget and as a result of that there was an option for councils to raise the social care precept in addition to social care grants that councils receive.
“I do think there’s a misunderstanding — this budget was specifically to address the Covid recovery and it is perhaps missing the point to focus on social care.
“What we do know is to improve social care is to have a strong economy and get people back into work and back into jobs.
“All of these have been addressed very very clearly so from the perspective, if we can boost the prosperity of the country as a result of today’s budget then that is to be the best way forward.”
Yvette Hastings, Federation of Small Businesses (FSB) Area Leader for Cheshire, said the Budget did “little to aid job creation or help people return to work”.
She added: “Thousands of small businesses are on the brink of collapse and thousands more are suffering from low confidence as cash reserves dwindle.
“They will welcome both the extension of flagship support schemes that have kept them going over the hardest year they have ever faced, as well as confirmation of new support measures around taxation, employment and cash grants.
“While the furlough extension is much-needed, small employers are still struggling due to high national insurance contributions and the removal of the job retention bonus.
“The Government should look again at these areas. Fundamentally, there was very little in the statement on job creation and reducing the cost of employment.
“The reintroduction of a small business corporation tax rate with a taper is good to see. The taper must be at a reasonable level, especially as directors of small companies have not received a penny in income support.
“It’s important that adjustments to a tax regime that already weighs substantially on the smallest firms are informed by small business expertise. A lot will hinge on the tax announcements due later in March, and the much-needed, delayed downward review of business rates.”
She said maintaining the £85,000 threshold for VAT registration “will not resolve the bunching issue” with firms nearing that turnover level stop growing.
“Company directors will be extremely disappointed to see that they have been left out in the cold yet again,” she added.
“There is still time to fix this entirely solvable gap in the business support landscape and we hope policymakers will take forward the proposals we’ve drawn up with experts in this field.
“A lot of small firms and sole traders that start to work in the summer will not be paid a penny until the autumn.
“The Government must reinvigorate its mission to end our late payment crisis, a mission which has been eclipsed for too long.”
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