22/06/2010
Double whammy for business says Chamber
Release: Immediate: Ref: Emerg budg 22.6.10
Double whammy for business says Chamber
It’s a double whammy for business as the Chancellor announces a rise in VAT to 20% from January 2011 and a rise in national insurance from April next year.
Katie Teasdale, head of policy at Birmingham Chamber of Commerce (BCI) said today’s Budget underlines the seriousness of the current economic situation and reflects the Coalition’s earlier commitment to balance the books by 2014/15.
She said: “Businesses will have to take the rise in VAT to 20 per cent from January 2011 on the chin. There’s no doubt it will impact negatively upon retailers and the leisure sector in particular - but the £12bn revenue raised from the rise will be crucial to reducing the deficit. We do welcome the six month delay which will allow our members to plan for the increase, minimise administrative costs and support a good Quarter 4 performance.
“The Chancellor is quite right to emphasise that recovery depends upon the UK being ‘open for business’. The Chancellor’s decision to outline his five year plan for the UK’s tax regime, particularly around Corporation Tax which will fall by 1 per cent every year for the next four years is to be welcomed.
“Changes to Capital Gains Tax must avoid harming entrepreneurial activity and business investment in the medium to long-term. We are pleased that capital investment allowances have been retained albeit reduced from 2012. This will support niche manufacturing in our region and allow them to plan their investment strategies over the next 18 months.
“The compromise reached on NICs is not all that we’d hoped. We wanted it to be fully rolled back. However, the decision to exempt start ups from NI payments for their first ten workers will help those businesses survive in a rocky period. We remain to be convinced that this will serve as a silver bullet for job creation in our region. Of more importance, will be cutting regulation, employment legislation and keeping on track with planned corporation taxation cuts.
“We’re very relieved that Birmingham New Street station redevelopment will go ahead. This is our number one priority for ensuring growth and investment in the West Midlands.
“What businesses want is stability, clarity and to be able to plan for the future.
“The commitment to tackle the welfare bill, public sector pay and public sector pensions is crucial. This is a really difficult economic situation. No-one relishes these decisions and the Chamber will do all it can to support growth and employment through what will be a very difficult period.”
Note to Editors
For further information, please contact the Chamber’s Press and Public Relations Manager John Lamb on 0121 450 4228 or mobile 07971 144064. E-mail j.lamb@birminghamchamber.org.uk
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Birmingham Chamber
Birmingham Chamber of Commerce and Industry is one of the UK’s oldest and largest Chambers and represents about 3,000 companies that employ over 170,000 people in Birmingham and Solihull. It offers extensive services to industry and commerce, having served the interests of business for over two centuries, promoting trade locally, nationally and internationally.