CHANCELLOR George Osborne today announced his final budget before May’s general election, making reference to the “Northern Powerhouse” on several occasions.
Here Wigan finance experts, local authority bosses and business brains react to the budget details and how they will impact on borough residents.
Wigan MP Lisa Nandy said: “What we needed to hear today was a plan to tackle low pay and high living costs, to stop the growing number of children in poverty and help the thousands of families here in Wigan forced to use foodbanks to put food on the table. We needed to hear the Government recognising the problem of zero-hours contracts and taking action to deal with them. We needed to hear that the Government will be doing more to tackle tax avoidance and stop trying to balance the books off the backs of the poor.
“Instead, we got a Chancellor who told us we’re all better off when in reality living standards have fallen month by month under his government. His claim to be a ‘friend of the North’ is a joke when you consider he’s made 75% deeper cuts to northern councils. It was deeply worrying that he didn’t give any assurances about the badly needed investment in our NHS. Yet again he’s cut taxes for the wealthiest, hammered working people and is borrowing more and more as a result. It is clearer than ever that we need a Labour Government, on the side of ordinary people and not just the privileged few.”
Paul McKevitt, Wigan Council’s deputy chief executive, said the announcement on business rates will benefit Wigan borough.
He said: “The business rates announcement is good news and is one of the advantages of going for the Devo Manc model.
Help to Buy is the Chancellor’s trump card yet again – and this significant new ISA scheme will help thousands aspiring homeowners accumulate what they need to jump onto the property ladderAdrian Gill - director of Your Move and Reeds Rains estate agents
“As part of the devolution agreement we have said we will grow our economy so the government is rewarding that proposal by letting us keep 100 per cent of business rates growth when it is usually 50 per cent.
“It means we can make decisions about how to use these rates rather than central government and take more responsibility for our economy and our services.”
Mr McKevitt said that the Chancellor indicated austerity would end by 2019. However, austerity in the first years after the election appeared to be deeper than initially set out.
Mr McKevitt said: “The next three years appear to be tougher than originally set out but the full details were not announced as part of the budget.”
Giving his Budget speech today, Chancellor George Osborne announced that the government is set to launch a Help to Buy ISA to help first-time buyers save for a deposit.
In the new Help to Buy ISA, the Treasury will add £50 of government money for every £200 set aside by a first-time buyer saving for a deposit - a 25 per cent tax-free bonus.
Adrian Gill, director of Your Move and Reeds Rains estate agents, comments: “Help to Buy is the Chancellor’s trump card yet again – and this significant new ISA scheme will help thousands aspiring homeowners accumulate what they need to jump onto the property ladder. First-time buyers have been dealt a cruel hand in terms of affordability lately – interest rates on savings are low, house prices have largely been on the up for the past six years, and – until recently – earnings haven’t followed suit. This shortcut to saving for a deposit will bring home buying within range for many more, and consumer confidence will certainly shoot through the bottom rungs of the market.
“But today’s announcement tiptoes around the elephant in the room. It’s all well and good getting first-time buyer finances in shape, but it will amount to hollow words if there are no properties available for them to buy, and if competition continues to push house prices higher and higher. Helping homeowners requires both sides of the conundrum to be tackled. The Chancellor has certainly done a good job of boosting demand – but now more needs to be done to sort out supply.”
Howard Cox, Founder of the FairFuelUK Campaign said: “Today’s Budget is very welcome that Fuel Duty has been frozen again. FairFuelUK has campaigned relentlessly to show that lower pump prices and in particular cutting duty stimulates GDP, generates new jobs and lowers inflation. But why doesn’t the Government go further and drive the UK economy continually upwards by cutting duty. It’s proven that will happen. We give Mr Osborne 6 out of 10 for endeavour and will continue to campaign that duty should be frozen for the lifetime of the next Parliament with more pressure on a real cut in the Autumn Statement. The Treasury takes nearly 70% in tax and still has not called for an Pump Pricing Inquiry. The Chancellor has been extremely lucky because Oil Prices have fallen dramatically and consequential lower pump prices have hidden the huge amount of tax still being paid by 32m voting drivers. This means the Government can take credit and hide behind a continual freeze in this levy. Oil companies get tax relief for their shareholders to benefit from future dividends whereas motorists continue to be fleeced by retailers, speculators and the Government. UK Motorists will decide at the ballot box in May which Party is best for them.“
Philippa Oldham, Head of Transport and Manufacturing at the Institution of Mechanical Engineers, said in response to today’s UK Budget:
“There are some welcome investments as part of today’s budget including the £60 million earmarked for the a new Energy Research Accelerator in the Midlands and the £138 million investment towards the UK Centre for Collaboratorium for Research in Infrastructure and Cities. These investments will hopefully help spur innovation and enable more joined-up cross sectorial thinking when developing new city infrastructure.
“The £100 million investment into Research and Development for intelligent mobility is also welcome news. Autonomous vehicles have the potential to make driving safer, greener and more efficient, and could help boost the UK’s vital car manufacturing sector. But Government must now work hard to convince the public of the benefits of these technologies – a poll by the Institution of Mechanical Engineers last year found that over half of the public would not use a driverless car.”
Commenting on today’s Budget statement, Darrell Matthews, North West Region Director at EEF, the manufacturers’ organisation, said: “The Chancellor gets three cheers from manufacturers today, particularly for the measures he included to boost exporters. His decision to bring forward compensation for industries facing vast and uncompetitive energy costs, such as steel makers, is also welcome but the full package needs to be put in place as soon as possible. In addition he has committed to a stable and competitive tax regime, which we wholeheartedly support and which should go down well with local businesses.”
“It is clear that the fall in oil prices has been a mixed blessing for manufacturing with firms exposed to delayed or cancelled investments in oil & gas exploration quickly feeling the effects through lost orders. Today’s announcement provides a solid signal from the Chancellor that government stands behind greater levels of activity in this important sector.”
“Recognition that action is needed on the level of investment allowances will be welcomed by manufacturers. This will ensure we don’t lose any momentum in the business investment recovery by withdrawing extra support through the tax system too soon. We now want to see a long term solution to creating a stable and competitive regime for investment announced later in the year.
“In addition, it is good to see government continue to press ahead with support for world class technologies with new investment in science and innovation infrastructure.”
“Boosting the UK’s export performance is a national priority and the Chancellor is right to keep the pressure on by providing additional resources to support exporters in overseas markets. This is another step in a longer journey to meet the government’s £1trillion export ambitions and help cement a more balanced economic recovery.”
“Looking ahead to the outcomes of the business rates review at Budget 2016, manufacturers will be looking for a system that is, above all else, stable and predictable. The commitment to expand the amount of money local councils can retain from their business rates growth is welcome news and will help to incentivise growth activities in all parts of the country that can do a deal with the Treasury.”
“Further efforts to make the R&D tax credit more accessible for small claimants will be welcomed. This longstanding relief within the tax system has come to be valued by manufacturers for whom investments in R&D are becoming ever more important for business success. If these changes can bring more companies into the scheme and encourage higher levels of investment in innovation, that can only be good for UK plc in the long run.”