Bath business experts have been reacting to Tuesday’s Spring Statement, with most pointing to what Chancellor Philip Hammond failed to deliver rather than what he said.
The city’s largest accountancy practice Bishop Fleming was particularly hard-hitting in its comments, calling it a “missed opportunity to be bold, imaginative and transformative”, especially as the UK’s departure from the EU is now just one year away.
The regional firm described the Chancellor as happy to keep a low profile for his first Spring Statement, which “lacked the vibrancy of the season, preferring instead to retain the cold blast of winter, with any good news left until the autumn Budget and the 2019 Spending Review”.
Bishop Fleming head of tax Andrew Browne, pictured right, slammed the statement for failing to tackle the real issues facing businesses, such as rates reform, tax complexity and red tape, and at the same time ignoring the looming cash crisis in our schools and healthcare sectors.
He said: “The Chancellor’s statement didn’t spring any major surprises, but instead was a masterpiece of understatement, lacking the vision needed for a country just 12 months from Brexit.
“We need to fundamentally look at how VAT works for businesses of all sizes after we leave the EU, so that it works for the UK’s benefit and does not discourage businesses from scaling up.
“There are already problems for small firms after last year’s freezing of the VAT threshold, with businesses trying to keep their turnover below £85,000 whilst at the same time battling rising business rates, the National Living Wage and pension auto-enrolment.”
Dominic Bourquin, pictured below left, corporate tax partner at accountants MHA Monahans, which has eight offices across the West of England, said Mr Hammond couldn’t be accused of dashing expectations.
“He began by warning us that he was at the despatch box to deliver an update, a progress report and some idea of the consultation to be carried out before the Budget next autumn. Not to come up with anything ground-breaking, either for businesses or for Joe or Joanna Public. And he was as good as his word.
“The update and progress report were broadly as expected. For anyone hoping that extra cash might shore up public services, though, there was disappointment. The most the Chancellor could do was hint that he’ll use his autumn Budget to ‘set an overall path for public spending for 2020 and beyond’.”
Mr Bourquin said there was little immediate relief for businesses in the Statement, but some promise for the future. The next business rates valuation will be brought forward to 2021, after which revaluations will switch to every three years so companies are not left paying historically high rates.
“There will also be a review to try to end late payments for firms, which can have such serious repercussions for cashflow – as was demonstrated by the long line of small firms left high-and-dry when that notorious late payer Carillion collapsed.
“And there will be investment in online platforms to help users pay the right amount of tax first time, as well as a new mechanism to ensure VAT on online purchases is collected.
“Some small firms will no doubt welcome additional support to take on apprentices as the education secretary releases up to £80m to help them do so. And small housebuilders, struggling to find the qualified bricklayers, carpenters and other key staff that are in short supply in the UK, can look forward to a new construction skills fund that will open for bids in April.”
Accountancy group KPMG’s South West senior partner Andrew Hodgson, pictured below right, said it was “the shortest fiscal statement in history” and so contained little in the way of detail, but added that it was still good to see Mr Hammond refer to Britain’s productivity challenge in his response to the OBR’s (Office for Budget Responsibility) forecasts.
“The issue is more relevant than ever for the South West as we are all too aware that our infrastructure is lagging way behind the rest of the country, and connectivity issues with our roads, railways and airports certainly has an impact on the region’s productivity,” he said.
“The government’s Industrial Strategy needs to fix these imbalances, and the government needs to support regional leadership if this is going to change.
“While the devolution of some powers and money to the West of England Combined Authority will improve the speed of decision-making and help focus on certain projects, it will not address the needs of the wider South West.
“We need investment in our young people to build a stronger workforce, encourage investment in technology to keep with a rapidly evolving economy and develop infrastructure to that connects businesses and general populations, particularly in rural and outlying areas.
“The Industrial Strategy is not a tired topic. Where money is going to be invested in the next 10 years is the key to unlocking higher living standards, raising long-term growth and creating a thriving economy in the South West.
“However, our local industries can’t just sit back and wait for the money to come in. Businesses in the South West need to think differently and need to find ways to be more efficient.”
David Westgate, pictured left, chief executive of Keynsham-based estate agents and property group Andrews, was pleased to hear that 60,000 homebuyers had already been helped onto the housing ladder since Stamp Duty was axed on purchases up to £300,000 in last November’s Budget.
But he added: “The fact remains, however, that it doesn’t go far enough. The government needs to better observe the rallying calls of those of us in the property sector and understand that Stamp Duty remains one of the biggest, if not THE biggest, obstacles in getting our housing market really moving.
“With anticipation high that November’s main Budget will be the platform for major announcements, I remain steadfast in my hope that there’ll be a removal, or at least a reduction, of the Stamp Duty surcharge on second properties.”
