Liverpool city region political and business leaders give their reaction to Chancellor Rishi Sunak’s Budget which seeks to pump more cash into the regions. Tony McDonough reports
An ambitious plan to create a London-style integrated public transport network in the Liverpool city region is a step close to reality following the 2020 Budget.
Chancellor Rishi Sunak unveiled a £4.2bn cash boost for transport in England’s devolved region’s, an announcement welcomed by Liverpool City Region Metro Mayor Steve Rotheram.
Mr Rotheram and the Combined Authority are spending £460m on new trains for the Merseyrail network and the Mayor is keen to scrap bus deregulation and introduce bus franchising accords the city’s region’s six boroughs. The Metro Mayor said: “Today’s Budget showed the benefits for our city region of having devolution and a Metro Mayor.
“After months of lobbying we were successful in securing a share of £4.2bn for transport to build the London-style transport integrated system we need, a share of £400m for development on brownfield land and further investment in FE colleges.
“This shows that across a range of areas funding is coming to areas like ours, which have a Metro Mayor, while areas that don’t missed out.
“But, despite some positives, it was not all good news today. Extra support to tackle the Coronavirus is welcome, but it comes on the back of the decade of austerity that has been endured by our NHS and councils.
“In many ways this was an admission of failure for a decade of under-investment in our public services and the brutal human impact it has had.”
Paul Cherpeau, chief executive of Liverpool Chamber of Commerce, said some of his members were already reporting disruptions to their operations due to the coronavirus and he welcomed the “measures and reassurances” designed to support businesses.
He added: “The robust measures include a 100% reduction on business rates relief for retail, leisure and hospitality businesses and a £3,000 cash grant for some eligible small businesses to support them during the outbreak.
“The financial implications of sick pay liability during the Coronavirus outbreak for businesses and employees has been a particular concern. It is a welcome relief that businesses will not face the cost of statutory sick pay alone if employees are required to self-isolate.
“The Government has promised to fund SSC for up to 14 days for businesses with less than 250 employees, and employees can claim sick pay from day one. In conjunction with the Bank of England’s decision to cut interest rates from 0.75% to 0.25%, today’s announcements are positive for businesses.
“It is essential that the accessibility to the support announced is simple, quick and robust to ensure the provision of an adequate safety net to help businesses whose cash flow and prospects have been disrupted due to the impact of coronavirus”
Peter Taaffe, managing partner of Liverpool accountancy firm BWM, said the Chancellor’s £30bn stimulus package to help alleviate the impact of the coronavirus was “an extraordinary response to what is a once-in-a-generation health crisis”.
He added: “In recent days there has been rising anxiety among the general public and the business community about the health and economic impact of the coronavirus.
“The Government says that up to 20% of the UK workforce could be off sick at any given time. That would have a huge impact on businesses of all sizes. There is particular concern for businesses in sectors such as retail, leisure and hospitality.
“The pledge to refund statutory sick pay for up to 14 days and scrapping business rates for this with a rateable value of under £51,000 will be a help but perhaps not enough for businesses already struggling with rates and internet competition.
“The loans scheme to help tide businesses over sounds interesting, but how easy is this going to be to access in time to pay bills, and how are these to be repaid out of reduced profits?
“The overall package of infrastructure investment, particularly into digital capacity, is also very welcome. The country faces big challenges, in particular the long-term decline in productivity. But at a time of national crisis it feels like the Government is taking decisive action.
“In terms of tax changes, perhaps the most profound announced so far is in Entrepreneurs’ Relief which reduces the amount of capital gain on the sale of a qualifying business eligible for a lower effective rate of tax from £10m to just £1m.
“This is a steep fall indeed but perhaps the Chancellor considered that those entrepreneurs selling out have done their bit for the economy and country already and don’t need such significant special treatment going forwards.”
On the changes to Entrepreneurs’ Relief, Ed Dwan, head of accountancy firm BDO in the North West, said: “The decision to lower the threshold for entrepreneur’s relief rather than abolish it is a welcome message for the 80% of business owners who will remain unaffected by the change.
“Alongside this came the commitment to continue to invest in ideas by encouraging R&D and green growth. With a heritage of innovation, ingenuity and entrepreneurial spirit, the North West is well placed to go for growth.
Today’s Budget made an encouraging start towards the Government promise of ‘levelling up’. Significant pledges were made around infrastructure investment, enhanced devolution and investment in education across the regions.
But while some specific projects were highlighted, it is not clear yet which towns and cities will be the tangible winners – or otherwise – of these spending announcements.
Sean Keyes, managing director of Liverpool-based civil engineering specialist Sutcliffe, welcomed extra cash for infrastructure and social housing. He said: “From a social housing point of view, the more money being spent on social housing improves the quality of life for the population and will increase job prospects within the construction industry.
“Likewise, I welcome investment in infrastructure as this can only be a good thing for businesses, jobs and the construction industry as a whole – especially during these uncertain times.
The UK needs this commitment to generate wealth, although it may take some time for it to trickle through the economy. For the city region, HS2 must remain a priority and equally we must also have improved links from west to east, connecting Liverpool to the likes of Hull and Newcastle.”
Kevin Ross, director and head of property at Merseyside law firm, Brown Turner Ross, said: “As expected the Chancellor included measures to support the public health response to Coronavirus, which included a 100% reduction in rates for retail, leisure and hospitality businesses with a rateable value below £51,000 and a £3,000 cash grant for some small businesses.
“As a small business owner, the prospect of temporarily losing workforce due to Coronavirus has been a concern for Brown Turner Ross and for many of our clients, I was relieved to see statutory sick pay measures announced to support businesses and employees.
“This is particularly important as we need to ensure our citizens are supported and the country continues to run whilst we battle the outbreak.”
Roland Hutchins, corporate partner at law firm Weightmans in Liverpool, said: “A new devolution deal for metro mayors and a £5bn broadband announcement for hard-to-reach places are evidence the Government is putting its money where its mouth is in a budget that had to quickly respond to the challenges posed by the spread of coronavirus.”
“Improved connectivity is at the top of Liverpool’s business agenda and any step to make it easier for firms to do business across the UK and globally must be welcomed. The challenge will be delivering what’s been coined as the biggest level of infrastructure spend in half a century quickly.”