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Budget 2013: Cumbria gives its reaction

Chancellor George Osborne has done little for Cumbria in his budget, it is claimed.

Rob Johnston photo
Rob Johnston

Rob Johnston, chief executive of the county's Chamber of Commerce, said it was disappointing to see growth forecasts reduced to 0.6 per cent this year, with only 1.8 per cent forecast next year.

"With this background, it’s even more disappointing that we haven’t seen drastic measures in the budget to boost growth. Today’s Budget goes nowhere near far enough.

"And with the Chancellor’s statement that debt reduction will slip two years behind his target we seem to have fallen between two stools – with neither a growth boosting Budget which hits debt reduction, nor a Budget which keeps us on track with debt reduction but does little to support growth.”

Commenting on other specific measures, Mr Johnston said:

  • Corporation tax: The reduction in the headline rate to 20 per cent from April 2015 is good news but is too small a cut to have a real impact on business growth.
  • National insurance – Employment Allowance: Removing the first £2,000 of Employers’ National Insurance Contribution is great news for business, taking as it does 450,000 businesses out of paying what is, in effect, a tax on employment. For the smallest employers it should have a real impact on the cost of taking on staff.
  • Fuel duty: Cancellation of the increase planned for September is good news but this is just cancellation of a planned rise – not a reduction.
  • Help to Buy: This should prove to be good news for those looking to get on the housing market and existing owners looking to move, and should help provide a much needed boost to the construction sector. There’d also be increased spending through the costs relating to moving house – both transactional and those around decorating etc, widening the benefit.
  • Heseltine Review: There was previous mention in the Budget of the Heseltine Review – following the announcement earlier in the week that almost all of the recommendations were being accepted. This is positive news for business and we look forward to working with Cumbria LEP, the county council and other partners on this. Here in Cumbria we’ve already made a significant step in bringing into being his ‘First Stop Shop’, which will be formally launched in the form of Cumbria Business Growth Hub very soon.

Cumbrian businesses have welcomed changes that will see every company in the UK get the first £2,000 taken off its National Insurance bill in a bid to boost job creation.

Mr Osborne said the move was aimed at small firms, adding that when the change starts next April, "one third of all employers" will not have to make any NI payments.

Harry Knowles, chief executive of Furness Enterprise, said he hoped it would boost job creation.

"In itself it might not make a big difference, but it will help with improving confidence, changing the mood into one of confidence and optimism in the economy which will make people think about investment and employing new people," he added.

Meanwhile Gary Lovatt, Federation of Small Businesses chairman for Cumbria, said it could tip the balance for fledgling firms in favour of hiring a new member of staff.

With the beer tax escalator gone and the price of a pint cut by a penny, head brewer at the Hardknott Brewery Dave Bailey said he would be raising a glass to the announcement.

“It’s good news. Obviously not only has he abolished the beer duty escalator but the planned two per cent increase is scrapped too.

“It probably equates effectively to a four per cent improvement on what we had been expecting,” he added.

Like all businesses, he said, beer producers faced rising costs but the one per cent tax cut would mean prices could be frozen for a year.

Westmorland and Lonsdale MP Tim Farron (Lib Dem) highlighted the beer price cut as a boost to Cumbria and said he would continue fighting for a cut in petrol prices.

“The budget contains good news for Cumbria - the proposed 3p hike in fuel duty has been scrapped. I'll keep fighting for a rural fuel derogation scheme that could cut petrol prices by 5p a litre.

“The cut of a penny off a pint of beer will go some way to support the community pubs which are the hubs of village life throughout our county.

“And the best news saved for last - the rise in the personal tax allowance to £10,000. This is brilliant news. In 2010 I spoke to families in our area and said that we needed to help middle and low income families and must give people a real tax cut.

“Today's announcement means that the government is putting £700 back in the pockets of ordinary working people, providing real financial help in tough financial times. This will help local workers, families and our high street.”

Copeland's Labour MP Jamie Reed called for a radical budget to kickstart the economy, but was left underwhelmed by Mr Osborne.

“After three years of failure, his tonic is more of the same. There is no growth in the economy, no job creation and no end to the hard times in sight. His plan has failed yet he will not change course.

“He is sticking to the tax-cut for millionaires while making ordinary west Cumbrians pay more. The income of working families will be hit through cuts to tax credits, the bedroom tax and the cuts to maternity pay all while the Exchequer signs a cheque for the very wealthiest.

“I said that we needed a budget that helps us to achieve our local economic potential and provide the platform for the jobs of the future; the Chancellor has failed again to deliver and he has failed the people of west Cumbria."

Have your say

TAX, TAX and even more TAX.

It matters little what's in the budget this time - just look at history and exactly how prices have risen over the last thirty or forty years, starting with that great con, decimalisation.

Just like going abroad, back in 1971 we didn't have a clue what the money in our pocket was worth, so we paid what what asked and the prices went up. And up.

Think about your last European holiday where you paid in foreign currency. Did you stop and think for a moment when the trip organiser asked for 80 euros for an excursion up a volcano or around the island or a donkey ride or a night out 'all-in'?

No, I bet you didn't, but that's what's been happening to us for years because we're confused about money and along with the constant constant rises in tax, tax on this, tax on that, now tax on everything and tax (duty) on petrol at around 60 plus percent this country has been a joke for years.

The govt has been pushing petrol tax up and up and up and they pushed as far as they dared 2 years ago and we rebelled, and they've been so careful since.

They are squeezing as much as they can out of us, it's a disgrace.

Posted by Auntie Tax on 26 March 2013 at 15:31

The most significant thing is 120Bn to prop up the banks.

we now provide the money for all mortgages, loans for small business and gambling chips for the casino, its absolutely farcical.

Pensioners and savers being robbed , all normal people being crippled with inflation, ill thought out bedroom tax and now this.... once in place it cant be removed without crashing the system. Stunning,next is the cyprus savings snatch if you have any left in the banks of course, forewarned is forearmed.

Posted by John on 23 March 2013 at 02:29

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