Region's business leaders and MPs react to 2021 budget
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The Confederation of British Industry (CBI) for the South West, Business West, as well as Weston and Wells’ MPs, John Penrose and James Heappey respectively, have responded to the Chancellor's 2021 budget.
In his address to the House of Commons on Wednesday, Chancellor Rishi Sunak announced further support measures for those on furlough, the self-employed and businesses which would be extended as the UK eases out of lockdown, as well as billions of pounds of funding for specific sectors, including hospitality and tourism.
New restart grants are set to help businesses, with non-essential retail to receive grants of up to £6,000. Hospitality and leisure businesses, including hairdressers and gyms will receive grants of up to £18,000.
The Chancellor also announced the 100 per cent business rates holiday will continue until June, as well as the five per cent reduced rate of VAT that will continue until September. However, corporation tax on company profits above £250,000 will rise from 19 per cent to 25 per cent in April 2023.
CBI South West deputy director, Ben Rhodes, said: “This budget succeeds strongly in protecting the economy now and kickstarting recovery.
“Firms across the South West will be relieved to receive support to finish the job and get through the coming months. The budget also has a clear eye to the future; to ensure finances are sustainable, while building confidence and investment in a lasting recovery.”
However, CBI, which speaks on behalf of 190,000 businesses of all sizes and sectors, expressed concern about the rise to corporation tax in 2023.
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They added: “Moving corporation tax to 25 per cent in one leap will cause a sharp intake of breath for many South West businesses and sends a worrying signal to those planning to invest in the UK.”
This sentiment is also echoed by Business West, which represents more than 21,000 businesses in the South West.
Managing director of the organisation, Phil Smith, said the rise was a ‘higher level than many were expecting’.
He added: “Many businesses recognise that the Government’s generosity has to be repaid – but will worry that it will fall on a relatively narrow set of wealth creators, making the tax base more vulnerable to changes in economic circumstance and reducing our international attractiveness.
“In regional terms, the West Country looks like it is losing out as much of the focus of the Chancellor was fixed on the North of England, Scotland and Wales. This is disappointing and we encourage our MPs and political leaders to continue to fight for our fair share of levelling up money to address the needs of this region.”
Weston MP John Penrose supports the Chancellor’s budget as he announced a ‘super deduction’ for business investment.
He added: “Britain invests too little in its economic growth; we live as a high-rolling economy, basing our economic growth far too much on domestic spending and not on investment. Therefore, measures to try to improve that and change it permanently and forever are absolutely essential.
"The Chancellor rightly pointed out that we languish down at 30th place in most international tables of business investment. This measure will vault us up in to the top few, perhaps even to the very top spot, in international investment in long-term growth.
“Business investment will ultimately be the only thing that allows us to have an economy that pays for the public services that we all want.”
Wells MP James Heappey also praised the budget which he believes will help revive Somerset’s tourism industry.
Mr Heappey said: “Here in Somerset, there has been a huge hole left by the lack of tourism and visitors to this great county and I know how difficult it has been for businesses across the patch.
“I hope the announcements have given my constituents cause for hope that there will be good progress over the next few months, both with heading back to normality through a world-beating vaccination programme and being able to start thriving again business-wise.”