I outline below how the budget will help businesses through cutting business taxes, encouraging exports and easing some of the costs of everyday expenses.
This is a good Budget for businesses, because the Budget reduces business taxes. It also helps give incentive to business to invest in growth by giving them tax breaks in the money they spend investing in the future and investing in creating new jobs, new plants, new machinery and also for smaller businesses, particularly in the high street. The Budget also helps to cut some of the burdens of business rate and business taxes, so there’s a lot for businesses to look out for on the Budget.
This is a Budget for business, which has been widely supported by the business community and that’s because we’ve really prioritised measures that can help businesses grow. Firstly, we’ve cut the business taxes significantly, so in 2010 a company tax was at 28% and next year it will be down to 20%, so that’s a big saving. Smaller businesses, particularly in the high street have needed more help and so we’ve introduced two very important measures that will help high street businesses this year. One is a £1000 cut in business rates, which is money they can keep, and the second is a cut in the employment allowance, the national insurance contributions that smaller businesses make. Smaller businesses will see a £2000 saving in the employment allowance and that again, is money that will go straight back into the business itself. So they are two very helpful measures.
There are other things we have done to try and encourage businesses to invest in their future growth. The investment allowance that is there for businesses, will allow them to spend up to half a million pounds a year, and not pay the tax upfront on that investment. So that can make a big difference to a business that’s looking to invest to grow. In addition to these measures in the Budget, we still have a number of other publicly funded schemes which are there to support businesses. And in Folkestone and Hythe in particular, we have the Regional Growth Fund, which is delivered by expansion East Kent, run by the Kent County Council, and that is there to give 0% loans to local businesses to help them grow and create new jobs. These measures together, are having a very beneficial effect on the business community. As we’ve come out of recession, we have found that more people are working than ever before, more women working than ever before, in particular, and the private sector has created over a million new jobs. And locally, we’ve seen unemployment come down by over 20% in the last four years. So that is good news for the local economy and the measures in the Budget should help businesses do more to grow.
The Budget got rid of the fuel duty escalator. Every year it is determined that fuel duty should go up a certain amount, and we’ve frozen that throughout this parliament. So there will be no increase in fuel duty this year, and fuel now is 20p a litre cheaper than it would have been if we had carried on with the fuel escalator that had been sent out by the last government. So year on year, the savings add up and make quite a big difference.
For bigger businesses too, there is a £7 billion package of measures, designed to help reduce the energy bills of companies. Particularly geared towards energy intensive companies, like chemical companies that require a huge amount of energy as part of their processes. So there are some big savings there to be made for businesses too.
There is also more money put into the finance to support companies who export. There is a £3 billion fund available for companies who are looking for export support and we want to do more to encourage more companies to export because that brings more money into the UK.
We should be doing as much as we can to encourage local businesses to look at exporting into Europe. A number do, like Laser Transporter at Link Park in Lympne, who are a logistics company that support exports across Europe, and we’ve got other businesses that do export. Sometimes we need to encourage people to take those first steps, and support with investing in the business, which makes it easier for that business to export, maybe in personnel or doing visits to trade fairs, exhibitions in other countries to get an idea of what the customer base is like there. This funding can help support those initiatives and UK Trade and Investment, which is the government body that works with businesses helping to export, is there to give technical support and make introductions as well. We’ve really prioritised growing our export markets, but we’ve got a lot of catching up to do.
We particularly want to help businesses that manufacture and make things, that’s an important part of rebalancing the economy. I think a really important part of that is the creative sector, we’ve got a growing creative hub here in Folkestone, but it’s also a sector of the economy that is performing very strongly, so the Chancellor was able to confirm in his Budget that we’ve got clearance now to introduce production tax credits for the video games industry, TV production, and animation. These sit alongside the tax credits that are already there for filmmaking. So this gives people real incentives to invest in this country, and this business is highly mobile, so a company that is going to invest in making a new film, could do that in the UK, France or the USA. So the production tax credits save a lot of money for companies looking to invest here, and that creates jobs in those sectors too. We’re looking to expand those tax credits now, beyond film and broadcasting into theatre production and regional theatre tours too. This is a great way to put money back into the creative economy and encouraging other companies to invest too.
These are the key points I think affect business in the Budget, but I’m interested in your views and you can have your say by visiting the ‘have your say’ section on my website, which can be found at www.damiancollins.com.