The Chancellor of the Exchequer, The Rt Hon Jeremy Hunt, is due to announce the Spring Budget on Wednesday (15 March). We have written to Mr Hunt to outline what we would like to hear in the Budget speech.
Childcare
The availability of affordable childcare is very much linked to the size of the UK’s inactive workforce and is a barrier to growth. According to Office for National Statistics (ONS) figures, the percentage of overall unemployed due to caring responsibilities (looking after family or home) has declined over the last five years but is still a significant issue for the UK economy, with an estimated 1.72m people in this position, 86% of whom are women.
There is an extensive provision of government schemes to support parents with childcare costs, including but not limited to 15 to 30 hours of free childcare for three and four-year-olds (and some eligible two-year-olds); such as the Tax-Free Childcare scheme; and the ability to claim back up to 85% of childcare costs (if eligible) for Universal Credit.
England has comparatively high costs of childcare and these costs have continued to rise, in many cases outstripping average earnings. Measures to develop more capacity provision in the childcare sector may help to bring these costs down and entice more parents back into the workplace, making a welcome contribution to economic activity.
Energy
The Energy Bill Discount Scheme (EBDS) announcement was welcome but fell short of the support required by most businesses. We feel that energy bill support should be considered a long-term investment rather than as a subsidy, given that many of those firms facing price rises have strong long-term prospects.
Businesses are encouraged to embrace aspirations to become ‘Net Zero’ but they need support to update technologies and this is particularly true for our ceramics sector. We call for Government support which will allow businesses to invest in greener technologies.
Business rates
A fundamental review of business rates has moved the system to a three-year cycle but soon, we hope to see a move to annual revaluations. This would allow rateable values to remain in step with market levels, as well as local economic cycles.
In its current form, the business rates system is a burden on businesses regardless of ability to pay and it does not make allowances for the major changes that have taken place in the UK economy over the last decade. Many commercial premises in towns and cities lie empty and serve as a reminder of a struggle to compete with online shopping. Indeed, all of our local centres bear witness to this with some faring particularly badly, deterring not only visitors, but also potential investors
Funded business support
When it comes to encouraging enterprise, we need a long-term strategic approach to government-funded business support. This would give more autonomy to local and regional communities and is vital for the future economic success of our area and the UK As a whole.
Most businesses prefer to access support and advice through familiar ‘front door’ non-public sector organisations such as Chambers’ of Commerce, who have that local footprint across our regions. Tangible outcomes from funded business support are always welcome, such as the opening of Etruria Valley Link Road, which will improve access between Hanley/Festival Park and the A500, as well as serving as a catalyst for regeneration.
VAT threshold
The VAT threshold can be a hindrance to business growth. Our British Chambers’ of Commerce (BCC) colleagues conducted some research which found that 57% of respondents agreed with the statement “my business is actively trying to keep below £85k turnover so that we don’t have to register to pay VAT”. This growth barrier exists for several reasons including administrative costs, concerns over the increased possibility of an HMRC audit and an inability to pass on the costs to customers, especially when competing with unregistered firms. We would like to see the Government take measures to address this barrier.
Our Budget asks were discussed at our recent Money Matters Forum, which meets every quarter and plays a key role in exchanging information on taxation, corporate law, finance, insurance and professional services sector issues. We meet again on Friday 23rd June and if you would like to join us, or would like to find out more about the forum please contact me: declan.riddell@staffordshirechambers.co.uk
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