Business monitor VER 6:Layout 1 18/05/2009 14:45 Page 21
BUSINESS MONITOR
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This year’s Budget might be a distant memory, but odds on you will be feeling the impact for months
to come. Paul Clapham takes a look at the winners and losers, highlighting some likely business
opportunities in the printwear and promotions industry.
R
onald Reagan famously told a meddling industry. It can be used on all new vehicles under this increase impacts on everyone. Note to
congress: “Don’t just do something, sit 3.5 tonnes. It has proved a major success in Chancellor: businesses have to make deliveries;
there.” Especially when times get tough Germany; will it work here? It has two obvious transport costs are not optional expenditure. Since
there’s a tendency to wish this on the Chancellor weaknesses: it is limited to the first 300,000 the self-employed tradesman is an important
at budget time. The law of unintended buyers and manufacturers and dealers are typically market for printwear, rising fuel cost may delay or
consequences is one that governments – and the discounting by at least £1,000 already, so the real discourage purchasing.
treasury in particular – have an infallible habit of impact will not be so significant. I also question In the same way, don’t expect increased orders
passing, so many people would prefer leaving whether those driving 10-year-old vehicles can from pub companies. Alcohol duty increases are a
things to the invisible hand of the market. afford (or want) a new car or van. (By the way, you penny on a pint of beer and 4p on a bottle of
So what is the outcome of the 2009 budget and, can’t dash out and buy a banger to qualify; you wine with 13p on a bottle of spirits. The British
in particular, what impact will it have on the must have owned it for more than a year). Beer and Pub Association says that this latest
printwear industry? increase “signs the death warrant for thousands of
The headline figure was a 50% higher rate income Time to buy British pubs”. Since they are already closing at a
tax band for those earning over £150,000. It VAT is going back to 17.5% in December. This has rate of 40 a week, that is an alarming prediction,
affects some 700,000 people. It comes together limited effect on registered businesses but it puts one that definitely has impact on printwear for
with reduced tax relief on pension contributions up retail prices and increases prices paid by non- whom pubs and their suppliers are an important
and reduced personal allowances for those earning registered or zero-rated businesses. Where possible business sector.
over £100,000. Accountants are suggesting that it will make sense to encourage such customers to The holiday industry also took a hammering. Air
this will result in an exodus of high-earners to buy before the increase takes effect. The retail passenger duty is effectively doubled and for long-
more benign tax regimes. It could happen, but I industry complain about the cost of re-labelling haul premium fares the increase is as much as four
suggest that these wealth generators will sit tight and changes to their tills which this demands. times the rate charged just two years ago. Buying
because the provisions don’t start until next April Fuel duty is taking a double hit: an extra 2p from trips to the Far East are going to become more
and there’s an election next year (at the latest). September, to go with the 2p increase from April 1 expensive. Fewer people were planning overseas
The car scrappage scheme will, hopefully, help the will be followed by an annual increase of 1p holidays this year and that looks likely to be fewer
retail motor industry climb off the floor. It offers a above inflation. The Chancellor must be hoping
government grant of £1,000 to be matched by the that the oil price falls to balance his rises because
continued over
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