The Budget 2014 - How will it affect you? Local Business Leaders Share their Immediate Reactions to the Chancellor's Statement

During today's Budget Statement, Mitchell Charlesworth, in conjunction with the Liverpool Chamber of Commerce, organised a round table panel discussion with leading members of Liverpool's business community in order to get an immediate reaction to the Chancellor's Budget statement and their views on how the Budget might affect them, their businesses and their clients.

On the whole, the panel agreed that the Budget was fairly neutral with some headline grabbing initiatives, particularly with regards to savings, pensions and the annual investment allowance for capital expenditure.

It was agreed that the Budget was presented with a view to a general election in 2015 and that the finer details would need to be analysed before any firm conclusions could be drawn.

Nevertheless, the round table provided some useful reaction to the outlined measures and gives an insight into how local businesses believe the Budget will impact them in 2014 and beyond.

The Budget Red Briefcase

Among topics discussed were: measures affecting businesses - specifically exporting and a reduction in energy costs, how the Budget would impact the North of England, the proposed new savings initiatives, the rise in the annual investment allowance, housing measures, further cuts to the public sector and infrastructure spending (specifically HS2 and the North/South divide).

It must be noted that the 'devil is in the detail' when it comes to the Budget and some panel members may have changed their views following more detailed analysis.

The round table panel members were:

Clive Plummer - Chairman, Mitchell Charlesworth

Jenny Stewart - Chief Executive Officer, Liverpool Chamber of Commerce

Malcolm Kennedy - Liverpool City Council   

John Sutcliffe - Sutcliffe and Chair of Liverpool Chamber of Commerce

Paul Grover - Arup

Matthew Ashton - MgMaStudio

Alan Tune - Butterworth Spengler (Commercial) Ltd

Muhammad Furqan - RS Clare & Co. Ltd

Jonathan Berkson - Bermans LLP

Paul Cherpeau - Business Engagement Manager, Liverpool Chamber of Commerce

Mary Smyth - Operations Manager for Training, Liverpool Chamber of Commerce

On the Budget in general:

Jenny Stewart: “It was a budget that you would expect a year before an election. I think he [George Osborne] was clever as there was lip service paid to a number of people right across the board.

“I think he delivered what would be expected a year before an election, and I think he may be keeping something back, but in so far as Liverpool Chamber is concerned and Liverpool Chamber members are concerned, the 3 stand out things for me are: Mersey Gateway support - £275m guarantee, the airport, whatever shape that may take and the Enterprise Zones and the apprentice grants.”

Alan Tune: “We are still spending more than we bring in so he [the Chancellor] has not got very much room to manoeuvre.”

Clive Plummer: “Generally, it was a fairly balanced Budget considering the Chancellor had little room for manoeuvre…and he [the Chancellor] was very keen to emphasise early on that pay restraints in the public sector will continue.”

Measures announced for the North of England:

Paul Grover: “There were specific measures announced for Liverpool Airport and with regards to funding for the Mersey Gateway Bridge. The emphasis was on supporting manufacturing and growth in the region.”

Malcolm Kennedy: “He managed to do the whole speech without ever saying the words ‘local authority’ and nothing about making any changes to the incredibly unfair way in which cities in the North have been treated in the Budget up until now.”

Clive Plummer: “I think securing the Mersey Gateway Bridge finance is encouraging and I am pleased that the government will provide start-up support for new routes from Liverpool Airport.”

Malcolm Kennedy: “Anything that bolsters links from other regions, connecting ourselves particularly to European trade is a good thing and I think we should be focussing on the transport planning and development in that sense, it is just far too light as a budget.”

On the new initiatives announced for savers:

Malcolm Kennedy: “I represent the Kirkdale ward where the vast majority of the population will not have anything like that level of savings.”

Clive Plummer: “He [the Chancellor] was encouraging savings and those savings have now got to be invested back into the economy to make it work… I think that the measures on pensions and savings are very good but the devil will be in the detail.”

On the measures for apprenticeships:

Jenny Stewart: “We [Chamber of Commerce] welcome the extension to the apprenticeship grant.”

Mary Smyth: “I think that the extended grants for apprenticeships is absolutely wonderful news because we are now able to engage with so many businesses, especially smaller businesses.

“It is great that we are able to offer apprenticeships even up to degree level, because we have good progression. 96% of our apprentices are either offered full time employment or progress and I think, given that young people will be leaving university in at least £27k debt, then it is absolutely brilliant news for us that the grant has been extended.”

On Business Rates:

John Sutcliffe: “I think we would have liked to have seen something on business rates, which have been neglected again.”

On the measures for exporting and reducing energy costs:

Paul Grover: “There were a few initiatives to assist in terms of exporting and growth… and trying to make the manufacturing industry more competitive to enable them to trade.

“I think it is a key point that we need to try and trade our way out of the deficit… so anything that will help manufacturing, especially in this region, will be seen as a benefit.”

Muhammad Furqan: “I think the budget will help exporters… and the £7 billion [package to cut energy bills] will help manufacturers so I think it was quite positive for us.”

Matthew Ashton: “If you are a business that is looking at opportunities to reinvest in yourselves or your equipment and looking to trade overseas, I think there are signs in there to help you to do that – so you can see that as a positive for business.”

On the rise of the Annual Investment Allowance for Capital Expenditure to £500,000:

Clive Plummer: “The rise the annual investment allowance from £250k to £500k is significant and for many companies, particularly SMEs, this will allow them to invest in machinery and not be under as many cash flow pressures.”

Jenny Stewart: ““The [rise in the] annual investment allowance to £500,000 might make a big difference to some of our small businesses here.”

On the measures to improve housing stock and ‘right to buy’:

Matthew Ashton: “I do not see how we will solve a housing crisis with self build… the idea of garden cities is a deeply flawed and outdated idea in the congested South-East. Is that all we can come up with in 2014?

I think the extension of the right to buy seemed positive and supportive…but it’s only for new build… and I think that is going to be cold comfort to anybody living in greater London where you are still talking about properties that are escalating out of reach because of the nature of the economy. I think more needs to be done.” 

John Sutcliffe: “Are we building houses to stimulate the economy or are we building houses because people need them?  I think in Liverpool it is both. People need houses, particularly social housing, but I think the statistics on housing are based around the south east.

“I understand the financial problems of the city (Liverpool), and there was nothing there to help us.”

Malcolm Kennedy: “There is also an issue because the housing stock that we have is heavily weighted towards the lower end of council tax bands and we don’t have enough higher bands. If we had the same social makeup as David Cameron’s constituency then we would have £100 million to invest in Liverpool just from local authority sources.”

On further cuts to the public sector - continued austerity:

Jonathan Berkson: “The private sector has to work with the public sector. He [the Chancellor] dressed up his cuts and further cuts in the public sector very nicely, as if he is doing us a favour, but… it is hard to get any public service working properly and the effect of that on businesses shouldn’t be overlooked.

"All the damage caused by cutting public services, which are working on a shoestring, should now be considered in line of how this is for business. Really, can they be cut any more without affecting business?”

On Capital Investment and HS2:

Jonathan Berkson: “It is the lack of capital investment that is the problem. To try and get yourselves around the country - the roads are gridlocked. To try and get yourself to Leeds is a joke, where is that investment?  It’s just not mentioned.”

Paul Cherpeau: “He made one reference to HS2 and then he glossed over it.”

Jonathan Berkson: “But that is connecting North to South, what about East to West?

Jenny Stewart: “We do need a new rail structure. He [George Osborne] needs to rebalance the economy and with that he needs to improve capacity and he needs to improve connectivity.”

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