'Budget doesn't do enough to help businesses' says Teesside restaurant MD
Yesterday the Chancellor John Healey set out a whole host of measures in the budget
A Teesside man who's worked in the hospitality sector for more than 30 years says the budget doesn't do enough to help businesses.
Yesterday the Chancellor announced measures to give people what he calls "breathing space" in his first Budget.
John Healey said the national minimum wage will increase by 3.9% next year to try to help more companies hire younger workers.
He also announced an increase in the threshold for small business rates relief for retail hospitality and leisure businesses from £12,000 to £18,000.
Liam Percy, managing director of Luna Blu in Yarm, said: "It kicked all the major decisions into the long grass. I would call it a 'soundbite budget', in that there wasn't a lot of substance in it for businesses.
"My rates on Yarm High Street are £70,000, and I get no extra relief. It might work for micro, very small businesses, the little one-man-band café type of thing, but the reality is that, for pubs and restaurants, there is nothing significant in that rate relief to offer us any hope.
"People are saying hospitality needs a VAT rate of around 10 to 13%, no more than 13%, to get to the point where it can be in balance and at least survive. We still run at 20%, and he has done nothing about that. He is tinkering at the edges with rate relief for very, very small companies.
"Anything of a reasonable size on a high street is going to struggle, because you won't get a venue on a high street with a rateable value of £18,000. It is much higher than that. I know that on Yarm High Street some of the pubs are paying north of £100,000 in rates.
"30 years ago, those rates used to cover your bins and the police. We never see a policeman now. We have all had our licences changed so that we have to have door staff on, so in effect we have incurred a £600-a-week increase in security, and our bins cost £600 a month. The costs are going up all the time, and we are not seeing any benefits.
"Once young people have worked seven-and-a-half hours, the company has to pay 15% National Insurance (NI) on every bit of money earned beyond £95, so it has a real negative effect on employing young people. Young people need to come into businesses like hospitality so that they get something on their CVs. It helps them in future when they go into other careers, or go to university. So I just don't see it as a positive step at all.
"I think a better way to help young people would have been to move the tax-free allowance up. I think it was a missed an opportunity. I don't see anything in it for business growth or for youth employment.
"I know he promised a few million here and there for schemes, but you're not fixing the problem. You're sticking an elastoplast on it. To get young people into employment, you need to create an environment where businesses want them, and we haven't got that.
"At the moment, we are still losing 24 venues a week, and that is a net loss. That's not just businesses closing and new ones opening. It is an actual net loss, so it already includes new businesses opening, because there are still people who dream of owning a pub as a project or a lifestyle. I wouldn't recommend it to anybody in this climate."
The Conservatives say it's a budget for 'getting by, not for getting on'.
Matt Vickers, Tory MP for Stockton West, said: "It's kind of more of the same. We're going to be paying yet more in tax, and yet we're going to be getting less for it. People out there are paying more in tax than they've ever paid before, but we've got fewer teachers in our schools and fewer police on our streets.
"Those people who are struggling to make ends meet at the moment are no better off, and we will continue to see unemployment increase, we'll continue to see inflation go up, and we'll continue to see no growth in our economy.
"That Chancellor was the Defence Secretary. He resigned because he said we were not properly protecting this country. He had a chance in there today to tell us how we were getting to 3%. He failed. He failed to tell us how he was going to get the benefits bill under control, he failed to say how we were going to protect this country, he failed to say how he was going to get taxes down so businesses can go on to create jobs. Disastrous budget.
"I think people will see it for what it is. When people look at how much more they are paying in tax now than they were paying two years ago, and how little they're getting for it, they'll look at that £100 and see it as the cynical effort that it is. I don't think anybody will be impressed. It goes nowhere near far enough.
"Every week, I speak to businesses in my constituency who are being absolutely battered. They're paying significantly more in business rates, they're paying more to employ people, they're being tied up in red tape created by this Labour Government. That is why businesses are going to the wall, that's why unemployment is surging, that's why a million young people in this country have nowhere to go each day: a million young people not in education, employment or training. That didn't happen by accident. It happened because this Labour Government battered anybody who dares to create jobs.
"When you tax a business or you tax a bank, those costs turn up somewhere for somebody else to pay. So time will tell on that front. But there's nothing in there that was innovative, exciting, or that is going to provide the answers to the problems that this country faces."