There was support for manufacturers, retailers, hospitality outlets, manufacturers as well as start-up and scale-up entrepreneurs in Chancellor John Healey’s Budget on Wednesday with Liverpool city region reaction here. Tony McDonough reports
Chancellor John Healey put small businesses in retail, hospitality, leisure and manufacturing front and centre of his Budget on Wednesday.
His acknowledgement of the importance of small business to the economy was welcomed by business leaders across Liverpool city region who say SMEs can do with every bit of support they can get in a tough economy.
Among the announcements made by John Healey in his address to the House of Commons:
- An increase in the threshold for small business rate relief for retail hospitality and leisure businesses from £12,000 to £18,000 paid for by a rise in duty on gambling machines in bookmakers.
- Tripling the tax-free trading allowance which is the amount entrepreneurs can earn from starting new ventures from £1,000 to £3,000.
- An extra £2bn for the British Business Bank to support start-ups and scale-ups including £200m for female-led ventures.
- British Industrial Competitiveness Scheme which will cut 25% off electricity bills for approximately 10,000 eligible manufacturing firms.
- An extra £1.5bn in funding was allocated to the Social and Affordable Housing Programme.
There were concerns among business leaders about another rise in the National Minimum Wage of 3.9% for both workers under and above the age of 21, putting more pressure on employment costs.
Greg Johnson, chief executive of Merseyside window and door manufacturer Warwick North West welcomes the establishment of the British Industrial Competitiveness Scheme (BICS) which will go live in April 2027.
BICS will provide 25% off electricity bills for approximately 10,000 eligible manufacturing firms across the UK. Each individual manufacturing site must consume at least 33 MWh of grid-supplied electricity per year to be eligible for support.
Greg said: “For manufacturers in particular, energy costs are a real challenge. The BICS scheme sounds like a good one but I want to see more detail about how it works in practice. Will it be enough to address a problem that is a real drag on British industry.
And Greg also said the widening of devolution was good news for Liverpool city region, adding: “Our region has its own unique characteristics and giving more control to local leaders over major spending decisions makes sense.
“People here on the ground are in the best position to know what is needed. The worry about giving more local power is will those in charge make the right decisions. In Steve Rotheram we have an experienced Mayor who knows exactly what the city region needs and we can trust him to get the big calls right.”
And while Greg did support more support for hospitality businesses in principle he does question why other types of small business aren’t also worthy of similar support.
He said: “Business rates relief for hospitality outlets is great for them and they are important to our high streets and city centre, but what is the logic of not extending that to other businesses.”
Liverpool law firm Gregory Abrams Davidson (GAD), which has multiple clients in the sector, said that increasing the threshold for small business rate relief for retail hospitality and leisure businesses from £12,000 to £18,000 could make a huge difference.
“More relief will be a great relief for many operators in the retail, hospitality and leisure sectors and could make all the difference to those businesses who have been struggling,” said GAD chief executive Gregory Abrams.
“In Liverpool in particular the visitor and leisure economy is huge – worth almost £7bn a year and supports around 58,000 jobs. We have a vibrant city centre and high streets that still thrive.
“Hearing that another 70,000 businesses will be taken out of paying business rates altogether is good news indeed.
“However, Governments often give with one hand and take with the other. We note the continued increase in the National Minimum Wage. People of all ages should, of course, be paid a decent wage but it is another cost rise for businesses already counting every penny.”
GAD lawyer Jonathan Abrams commented on changes to Business Asset Disposal Relief. He said: “The threshold has been cut from £1m to £500,000. This means that if you sell your business or qualifying assets, the amount of gains eligible for the lower tax rate is now halved.
“There is no change to tax on income from dividends or income from employment, so your regular income streams remain unaffected.
“This adjustment could affect how you plan business exits or asset disposals, making it even more important to review your strategy with an advisor to optimise your tax position.”
More support for entrepreneurs was applauded in the city region. Mr Healey told the Commons: “Britain does not lack great entrepreneurs. Too often we invent technologies and world wants here in the UK and then see the jobs and profits go somewhere else.
“High growth firms make up less than 1% of SMEs and generate more than half the output. From the start-ups of today to the scale-ups of tomorrow to the billion pound companies of the 2030s. I want to see them succeed and stay in Britain.”
Louise Towers, group chief executive of Merseyside Special Investment Fund (MSIF) was encouraged by the Chancellor’s acknowledgment of the importance of start-ups and high-growth firms and welcomed extra support for entrepreneurs.
Since the 1990s MSIF has been providing loans and equity investment for SMEs in Liverpool City Region and across the North West. As a place-based fund, it also welcomed discussion around devolution and the potential investment solutions it could bring for regional businesses.
“Start-ups and scale-ups are a vital and often under-appreciated part of the enterprise landscape,” said Louise. “They create jobs, push forward new innovation and make a huge economic contribution.
“Business founders take big risks both in the start-up and growth phases. We are here to support them and it is good the Government recognise that our efforts need their backing.
“So an extra £2bn for British Business Bank, including a £200m commitment to women-led businesses is most welcome, as is the Young Entrepreneurs Allowance.
“Part of our mission at MSIF is to encourage people from all sections of the community to start becoming entrepreneurs. We have long said that women are under-represented as business owners and this will help inspire more female-led ventures.”
Andrew Borland, who heads up the University of Liverpool’s Novel programme for business leaders, has previously spoken of the need to keep innovative companies in the UK.
“It was good to hear the Chancellor say he wants innovative and high-growth businesses to ‘succeed and stay in Britain’. Here are the University’s Virtual Engineering Centre (VEC) where we work with some of the best and most innovative minds.
“They offer groundbreaking ideas and a strong will to get those ideas off the ground and out into the real world marketplace. They will go where they can to get the best support, and too often that means overseas. We need to work as hard as possible to keep them in the UK.”
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The Chancellor also announced an extra £432m for a programme aimed at giving every rough sleeper in England a route off the streets by Christmas. Liverpool-based UK-wide security firm GSTS welcomed this commitment.
“At GSTS, we welcome the Government’s commitment in today’s Budget to tackling homelessness and addressing the misogyny that threatens the safety of women and girls,” the firm said.
“But creating safer public spaces requires more than funding and policy commitments alone – it requires practical action on the ground.
“Frontline security professionals have an important role to play in helping create environments where people feel safe, whether that is in public spaces, workplaces or healthcare settings.
“Investment in prevention, staff training and effective partnerships between security providers, public bodies and local communities will be essential to turning these ambitions into meaningful change.”