POLITICS
Chamber highlights priorities ahead of November’s Budget
Chamber writes to the Chancellor of the Exchequer, Philip Hammond, to remind him that he has potentially only two more Budgets in which to make sure UK plc remains fit for business post-Brexit.
If Government fails to secure a transitional deal with the EU, Mr Hammond’s 2018 Budget, just 12 months from now, will be his last before the March 2019 exit date. “We would expect to see hints in his Budget
this month that Mr Hammond is at least looking 16 months ahead and considering the possibility that we could end up leaving the EU without any deal in place,” said Chris Hobson, Director of Policy at the Chamber. The letter also sought reassurances from Mr Hammond that he will put the needs of business, as the creators of jobs and wealth, at the top of his Budget priorities. “Just as membership of the EU impacts every
business in the UK today, so will our exit, and Mr Hammond has only limited opportunity left to him to reassure businesses that every step possible will be taken to help them through what might be a turbulent few years,” Chris added. One of the perennial complaints of business is
the current rates system. It demands payment before a firm has made a single sale, takes no account of a firm’s ability to pay and, effectively, punishes firms that improve their premises or invest in plant. “Because the broken rates system is based on
the rental value of business premises, and that includes plant, any firm that makes its premises look nice or buys shiny new machinery effectively increases the rent that could be charged and that, ultimately, increases their business rates,” said Chris. “This acts as a disincentive to businesses to
make improvements, which is nonsensical,” he added.
Although from 2020 unitary authorities will be
allowed to keep all the business rates they collect, instead of the money going into Treasury coffers for redistribution as deemed appropriate, they will have, initially at least, no say over the valuations imposed and only limited discretion about the rebates they can offer. Chris said: “Business rates must be based on a firm’s ability to pay, not the perceived rental
30 business network November 2017
In the latest Quarterly Economic Survey (Q3)
carried out by the Chamber, over a fifth of businesses (22%) said business rates were of greater concern to them during the third quarter of the year than they had been previously, although this figure was lower than it had been in the second quarter when revaluations were published. Concern over interest rates and exchange
rates both rose in Q3 compared with Q2. Chris said: “The message to the Chancellor is
Business will want assurances in the Budget
‘The forthcoming Budget provides an opportunity for Government to demonstrate that it hears the message from business and is taking meaningful steps to reduce the increasing costs that businesses in the UK face’
value of its premises and machinery. It’s a perennial complaint, but one we have raised again with Mr Hammond. “Fixing the broken business rate system will
help to make UK firms more competitive going forwards – which will be essential, deal or no deal. Allowing unitary authorities to set their own rates and rebates will allow them to make themselves more attractive to inward investment, and that will be good for the UK economy.”
clear, steps need to be taken now to unshackle British business. Things haven’t really improved since we wrote to Mr Hammond in February for his March Budget where we advised him that any vision for a successful UK economy outside of the EU must be underpinned by a regulatory and tax environment conducive to good business.” Another frequent complaint of Chamber members is that the cumulative impact of Government policy brings with it a resource burden that increases the day-to-day costs of doing business, costs often driven by the unintended consequences of policy measures that are introduced without a full appreciation of the realities of implementation. Examples include the apprenticeship levy, pensions auto-enrolment, insurance premium tax, dividend tax, national living wage, immigration skills charge, making tax digital, changes to national insurance rules and restriction of travel and subsistence costs for small companies. “The forthcoming Budget provides an opportunity for Government to demonstrate that it hears the message from business and is taking meaningful steps to reduce the increasing costs that businesses in the UK face, which will negatively impact our competitiveness on the global stage.” Additionally, the Chamber is calling on Mr Hammond to demonstrate to the world that UK plc is very definitely open for business by backing vital infrastructure projects, not least
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