Budget 2018 – What do you need to know?
Following the Government’s Budget announcement yesterday, take a look some of the stand-out impacts on our four key sectors in our latest budget response blog.
The sooner we have some certainty on Brexit…
There are clearly some positive initiatives in the budget speech, on tax and personal allowances, and investments in the high street and transport infrastructure. It is also good to have a positive outlook on the economy, growth and a potential end to austerity.
Having said all that, the bigger imperative for all of us in business is knowing the outcome of the Brexit negotiations, as against minting a coin on the issue. Because this will have a significant impact on all of us. The sooner we have some certainty on Brexit, the sooner we will all genuinely be able to move our businesses forward and plan our future with confidence!
Miles Brown, Coffin Mew CEO.
Housing and the high street, does this budget help to alleviate concerns for the Real Estate Sector?:
Whilst some will welcome a number of the Chancellor’s announcements in this year’s budget, many are still looking for radical solutions to twin crises affecting the property market: housing and the high street.
The Chancellor announced £500m for the Housing Infrastructure Fund to help deliver 650,000 new homes, new housing association partnerships to help deliver 13,000 more, and up to £1 billion in bank guarantees to help small housebuilders deliver their housing schemes. He also abolished stamp duty for first time buyers of shared ownership properties valued up to £500,000. Businesses with a rateable value up to £51,000 will have their business rates cut by one-third for the next two years, saving many around £8,000 each year and local councils will receive support from a Future High Streets Fund. However, whilst these measures will be welcome, both crises need long term strategic plans, providing for an even larger increase in housebuilding, alongside a transition to a new leisure experience focussed, rather than retail focussed, high street.
These strategies will need to address a wide range of major challenges, such as the reduction in labour available to housebuilders since the Brexit referendum and the threat to high street businesses from giant online retailers.
The devils in the ‘data’ for both large and smaller start-up companies in the Technology Sector:
Announcing a crackdown on tax avoidance and evasion by the tech giants will certainly play well to the public gallery. Following the recent data breaches and revelations about how data is handled the public mood is clearly to try and bring them down a peg or two.
However, for sector specialists, those working with tech start-ups and businesses looking to scale-up, the devil will inevitably be in the detail as to how the system will be ‘carefully designed’ to ensure the burden is shouldered by the giants. With Brexit looming the tech sector will remain a key part of our economy and anything which could depress or dampen that buoyant area of the market must be approached with caution.
What does the investment in rural broadband, the increase in investment allowances and Brexit mean for the Agricultural & Rural Business Sector?:
The £250m investment in high speed rural broadband is a boost to dynamic farmers and growers who embrace technology, and who increasingly have on-farm diversified businesses allowing them to access wider markets. It is also good news for the wider rural business sector and communities generally. However, the increase in Annual Investment Allowances to £1m for two years falls short of what industry representatives had requested and, as the agriculture sector generally has longer term investment cycles, longer term solutions are required.
The increase in government departmental budgets to help deal with Brexit generally and increases in lending facilities for UKEF are positive, given the many farmers and growers who rely on exports and will continue to do so into new markets following Brexit. However, as with all budgets we wait to find out the finer details and headlines often belie qualifications and quid pro quos in the small print.
Derek Walsh, Partner & Head of Agricultural and Rural Business.
There is still more to do when it comes to mental health in the Care and Protection Sector:
Whilst it’s really positive that the Government has recognised mental health as a priority area with an investment of £2bn per year to support mental health, there is still much to do with regards to Care funding. Investment is needed in community based services, more funding for care homes and support for charities that specialise in mental health provision to strengthen early intervention facilities.
Annabelle Vaughan, Partner & Head of Care and Protection Sector.