- Thursday, April 25, 2024
By: Radhakrishna N S
By Nadeem Badshah
BUSINESS leaders have praised chancellor Rishi Sunak’s budget for scrapping business rates for small firms and his Coronavirus response fund, but critics have hit out at the chancellor’s response to the social care crisis.
Sunak announced in his first spring Budget last Wednesday (11) that thousands of retail, leisure and hospitality firms will not pay any levy for one year.
He also unveiled a £30 billion package to boost the economy and get the country through the Coronavirus outbreak. Some £12bn will be targeted towards the pandemic, including at least £5bn for the NHS in England and £7bn for business and workers across the UK.
But opposition MPs say Sunak, who replaced Sajid Javid in February, overlooked some women’s issues and revamping Universal Credit benefit payments.
Paresh Raja, CEO of Market Financial Solutions, told Eastern Eye: “The scrapping of business rates will provide much needed relief for smaller firms, particularly given how tough recent trading periods have been for high street businesses and retailers.
“This reform reflects the government’s commitment to supporting the private sector – something that was at the heart of the Conservative manifesto in the lead-up to the 2019 general election.
“The government is also not taking any chances when it comes to Corona virus. The announced respond shows just how serious the government is taking the virus outbreak while also ensuring appropriate measures are in place to support businesses and consumers.”
Other measures unveiled by Sunak in March were raising the tax threshold for National Insurance Contributions from £8,632 to £9,500, freezing fuel duty for the 10th straight year and more than £600bn to be spent on roads, rail, broadband and housing by 2025.
Ritam Gandhi, founder of digital firm Studio Graphene, said due to the escalating Coronavirus, the budget was less of an economic policy overhaul in the wake of Brexit and more a holding operation.
He said: “While the announcement might have been less punchy than expected, it was nonetheless reassuring to see small businesses haven’t been overlooked in the government’s contingency plans; Sunak has offered his commitment to help businesses manage their cash flow as they deal with any financial fallouts experienced from Covid-19.
“Tax commitments in the Conservative Party’s manifesto have also been given the nod. Entrepreneurs’ Relief, which has been criticised for disproportionately benefitting wealthier entrepreneurs and failing to deliver on its objective – to incentivise people to create new businesses – is set to be revamped.
“I believe tax breaks are incredibly valuable for business leaders, but we must ensure that they serve to benefit everyday entrepreneurs and not just a select few. The EIS (Enterprise Investment Scheme) and SEIS (Seed Enterprise Investment Scheme) should be used as inspiration for policies introduced further down the line.“
He added: “The commitment of £130 million of new funding to extend startup loans is a good first step, but it must be the first in a series of measures aimed at providing the support required for startups to raise the capital they need to both launch and scale – particularly in these testing conditions.”
Labour MP Afzal Khan said Covid-19 is an unprecedented challenge for the UK, and the government needs to strengthen the safety net available to the most vulnerable in society.
He told Eastern Eye: “As the Corona virus pandemic unfolds, more and more people will be in need of this social safety net than ever before – especially those who aren’t eligible for sick pay or who have unstable jobs.
“For many of these people, the initial five-week wait for their first Universal Credit payment could cause real hardship. It’s a well-documented fact the five-week wait is already pushing vulnerable people to food banks, trapping many in years of debt and making outstanding issues with housing, ill-health, disability and domestic abuse worse”.
Meanwhile, Labour MP Tanmanjeet Singh Dhesi criticised the chancellor for overlooking the social care crisis.
He said: “Despite an ongoing social care crisis, which will be compounded by Covid-19, the chancellor failed to mention any substantial plans to improve the quality of social care in the Budget.
“Given that 87 people a day die waiting for the care they need, this issue cannot be ignored.”
Munira Wilson MP, the Liberal Democrat’s health spokesperson, called on ministers to go further in supporting those who could face financial problems due to Covid-19.
She said: “For example, the government must ensure that Universal Credit payments are expedited for all claimants, that those on zero hours contracts are adequately compensated and that particularly vulnerable groups, like those who are homeless, have safe places for self isolation.
Tej Parikh, chief economist at The Institute of Directors, believes the bumper package of support from the chancellor will support small firms with Corona virus-related cashflow challenges.
He added: “The cut to business rates will ease overhead costs while measures to delay tax payments and extending loans to the business community will help firms bridge this difficult period.”
Entrepreneur and television presenter Saira Khan called for more cash to be given to charities supporting abuse victims. She said: “Yes, he (Sunak) abolished the tampon tax – the five per cent VAT charge forced on us poor women every bleedin’ month.
“But some £62m of that money had been directed to women’s charities and this bonkers Budget makes no mention of where that cash will come from now.
“Services that help women and girls suffering violence need to be funded to the tune of almost £400m a year. “If Sunak has all these readies to throw around, let’s hope he remembers to throw some their way.”
