John Mulgrew: Mini-Budget 2022 – A boost for big business, but much still needs to be done to help the private sector and NI households FindSexyJobs

0
2

FSJ News Updates,

In many ways, there was nothing “minimal” about Kwasi Kwarteng’s financial statement before a packed House of Commons this morning.

It was a case of fiscal policy giving with one hand and monetary policy taking.

The recently appointed chancellor unveiled a series of pro-business initiatives which he says are aimed at supporting the private sector – most of which are under significant pressure due to inflation and soaring energy costs.

An energy package aimed at easing at least some of the recent power surges will cost the public purse £60bn in the first six months.

The big wins for big business came from the freezing of the proposed corporation tax hike first proposed by former chancellor Rishi Sunak. That means it will remain at 19%.

And for our highest earners, he said the top rate of income tax, the 45% rate on earnings above £150,000, is being scrapped entirely.

Mr Kwarteng also said he would cut the basic rate of income tax to 19p in April 2023 – a year early.

He said of the planning that there will be announcements in the coming weeks that will simplify and speed up the process for businesses and developers.

He also unveiled low-tax “investment zones” that will allow planning rules to be eased and cut business taxes to encourage investment.

And he said the Bank of England was taking further steps to control inflation and the Government regarded the Bank’s independence as “sacred”.

But while top earners and big businesses are likely to reap the rewards of many of his rather bold statements this morning, the industry has so far poured some cold water on what this will actually mean for the industries and small businesses under the most pressure .

According to Hospitality Ulster’s Colin Neill, this includes the absence of a general reduction in VAT or the reintroduction of business holidays.

“It was extremely disappointing that the chancellor did not see fit to make these major changes in his statement today,” he said.

“Measures including the repeal of corporation tax and alcohol tax increases are fine in theory, however any impact depends on the level of trade and profitability, which is sadly lacking. Additional support measures will be needed to adequately offset the burden on industry.”

The GMB trade union has said the corporation tax cuts announced in today’s mini budget will cost the public £14 billion.

The chancellor also revealed that booze tax increases have been scrapped, while the government will introduce VAT-free shopping for tourists.

Tony Danker, chief executive of the CBI, appeared much more positive about the announcement this morning.

“It’s a tipping point for our economy. Like Covid, the energy crisis meant the government had to spend massively to protect people and businesses. That means we have no choice but to go after growth to afford it,” he said.

“Today is the first day of a new approach to growth in the UK. We must now seize this opportunity to take advantage of this and bring growth to every corner of the UK. Fifteen years of anemic growth can’t be repeated… it’s not perfect – it’s just the beginning – but there’s plenty of business to work with. The chancellor has hinted at further proposals coming this autumn which will be crucial to maintaining growth momentum.

LEAVE A REPLY

Please enter your comment!
Please enter your name here