The Federation of Small Businesses, Retail NI and the Institute of Directors Share Mixed Reaction to The Chancellor’s Budget.
FSB NI reacts to Budget 2021.
Following the Chancellor’s Budget Statement, Head of FSB Northern Ireland, Roger Pollen has welcomed the continued support for jobs and the self-employed.
Commenting, Roger Pollen, said: “Going into this Budget, our key message to the Chancellor was to continue to support jobs and the self-employed. It is therefore welcome that the furlough scheme has been extended, given that it currently supports more than 100,000 jobs in Northern Ireland.
“While the extension is appreciated, the increasing employer cost from July onwards will make the scheme prohibitive for many, as businesses already tell us that the current level of employer contribution is creating intense financial pressure.
“The broadening of the Self-Employment Income Support Scheme (SEISS) to those more recently self-employed and the announcement of a fifth SEISS grant is crucial for those who have been among the most impacted by the economic fallout of coronavirus.
“Tourism and hospitality businesses have borne the brunt of coronavirus restrictions, and have not been able to harness the benefit from the reduced rate of VAT which was previously granted to the sector, as their doors have largely been shut.
“The extension of a reduced rate of VAT for a further 12 months will be important as this key sector gets back on its feet. Extension of the reduced rate of VAT was one of the key asks which FSB included in our Budget submission to the Treasury ahead of the Budget. The Government should ensure that the broadest range of tourism and hospitality businesses can benefit from this reduced rate.
“The planned increase in Corporation Tax does cause concern, however the introduction of a Small Profits rate may limit the damage from the introduction of this policy, and we will have to study the detail of the ‘super deduction’ for business investment to analyse the overall implications of this policy intervention.
“While the Chancellor outlined further rates relief for businesses, these measures apply to England only, however the Barnett Consequentials which flow from this decision will provide more funding for the Northern Ireland Executive to support businesses properly through appropriate rate relief.
“We will be engaging with Executive Ministers on future rate relief for businesses in Northern Ireland.
“It was encouraging to hear that the first allocations have been made as part of the £400 million ‘New Deal for Northern Ireland’. It is vital that this funding is used properly to invest in skills and boost economic development.”
Retails NI Says Budget Is Like A Curate’s Egg.
Reacting to the Chancellors UK Budget statement, Retail NI Chief Executive Glyn Roberts said: “Overall, this Budget is a bit of a ‘Curate’s egg’ with a mixture of positive and not so positive measures for the business community in Northern Ireland.
“We welcome the extension of the Furlough scheme until the end of September, but with employers expected to contribute 10% which will rise to 20% in the summer, it does reinforce the need for the Executive to clarify the timescale of its ‘strategy’ of lifting restrictions and allowing businesses to reopen.
“The Chancellor outlined proposals for a £6k Restart Grant per premises for independent retailers and other businesses – this is something we want our own Executive to introduce in Northern Ireland.
“Rishi Sunak has also introduced a year of rate relief for independent retailers in England and this is something our members expect to be brought forward by own Finance Minister.
“The increase of Corporation Tax could potentially cause problems for our recovery and poses huge questions for the future of Northern Ireland having a similar rate to RoI. That being said, it is welcome that some smaller businesses will be protected from this increase with the maintained 19% small profits rate.
“The big questions arising from this Budget are now directed back to the Northern Ireland Executive and how they are going to use the £410m extra funding to support business as we begin the long road toward a post-pandemic recovery.
IoD Says Budget provides solid platform for recovery.
Responding to the Chancellor’s Budget speech, Jonathan Geldart, Director General of the Institute of Directors, said: “This Budget delivers a solid platform for many businesses to relaunch as the economy reopens.
“The extension to the furlough scheme will provide a vital cushion to support jobs as restrictions unwind and firms begin the costly process of rescaling. Restart grants and ongoing business rates relief give a cashflow boost to many firms that will struggle to make full productive use of their properties as restrictions linger.
“Widening income support for the self-employed is a step forward, but the Chancellor missed a trick by not providing grants for company directors who continue to be left out in the cold.
“The Chancellor’s efforts to combine life support for the economy with measures to turbocharge growth is the right call. Vouchers for SMEs to invest in technology, and provisions for management training, will help address the UK’s long-standing productivity problems whilst also boosting businesses’ ability to bounce back from the pandemic.
“The recovery loan package will offer a helping hand to many firms, but more needs to be done to catalyse equity investment in our cash-starved start-ups and scale-ups.
“Re-training and re-hiring will be uplifted by reforms to the apprenticeship levy and further financial support for both apprenticeships and traineeships. An improved visa route for the high skilled will foster innovation, as will steps to review R&D tax credits.
“The prospect of higher taxes will no doubt bite for many firms that are still tending to wounded balance sheets. Delaying and tiering the the corporation tax rise is a pragmatic approach, though adjustments to the plan should remain on the table as a clearer picture of the recovery emerges.
“Overall there is much for businesses to get behind in this Budget, and the Treasury should remain prepared to extend support if the roadmap goes off course, whilst building on its stimulus package today to drive long-term growth well beyond our immediate recovery.”
Dodds Comments On Budget Proposals.
NI Economy Minister Diane Dodds has commented on the economic measures announced in the UK Budget today.
The Minister said: “The Job Retention Scheme has seen significant take-up in Northern Ireland, with in excess of 100,000 people furloughed. I have been clear that, rather than ending on 31 March, the scheme would be required for some months to come, and I called on the UK Government to extend it. I therefore welcome the Chancellor’s announcement that the scheme will continue until the end of September.
“The tourism and hospitality sector in Northern Ireland has been, and continues to be, acutely impacted by the pandemic. The extension for these businesses of the 5% reduced rate of VAT to the end of September is also a welcome step.”
The Minister continued: “The Treasury’s Self-Employed Income Support Scheme (SEISS) has helped many self-employed people in Northern Ireland and I welcome the announcement today of details for a fourth and fifth grant.
“The Chancellor has also today committed to making eligible for the UK-wide SEISS those who became self-employed in 2019/20 and have filed a tax return for that year, and this is also to be welcomed.
“I will be keen to see more detail on other UK-wide schemes that were announced, such as measures to support business investment and the Help to Grow initiative to help businesses boost their management and digital skills, to see how local businesses can benefit.
“The launch of the Economic Recovery Action Plan for Northern Ireland last week is a milestone which allows us to look beyond the current climate and plan for recovery, and I look forward to better times ahead for the local economy.”