Budget 2021: Consumers are the winners as big business loses out
- Credit: Archant 2021
Who are the winners and losers in Rishi Sunak's pivotal Budget? We asked bosses across Norfolk how their sectors fared.
Book your tables well in advance for June 21 - because the Budget just guaranteed cafes, pubs and restaurants will be even busier than expected, hospitality bosses have said.
The slash of VAT to 5pc on food, drink and days out has been continued for the leisure sector, aiming to incentivise people to hand over their cash.
Phil Cutter, the landlord at the Murderers in Norwich, said: "The initial period that we reopen will be great, but what we're doing is just recouping the losses that we've made over the past 12 months. I expect the first few months to be good but ultimately there's a great deal of catch up that we've got to do."
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But he added that although the measures are a "step in the right direction" for landlords £18,000 is a "drop in the ocean" compared to mounting debts: "This is not nearly enough to make PAYE, rents and overhead payments over a year worth their while".
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Phillip Turner, who runs pubs including the Globe Inn at Wells-next-the-Sea through the Chestnut Group, is hopeful the VAT cut will not be a temporary measure.
He has previously urged Mr Sunak to keep the tax for the hospitality sector down for good as he fears the public's habits will change in the long-term due to the pandemic.
He said: "The government knows the demand for hospitality is going to be great over the next six to 12 months and they want to benefit in some way from that."
But some trends caused or exacerbated by the pandemic had sounded the death knell for some pub businesses where working patterns such as home working was changing behaviour, he believed.
"There are structural changes in how we live our lives which the budget cannot fix," he said.
However he was impressed by Mr Sunak's proposals: "I think it's Rishi. It's articulated well . It's balanced. It's well thought-out. There aren't too many surprises in it."
He particularly welcomed the announcement of a temporary 130pc "super-deduction" on corporation tax for those companies in a position to invest. "I think it's brilliant - I think it's very positive," he said.
The budget had provided everything brewery Adnams asked for and even had "the cherry on top" in the form of freezing duties on alcohol.
Andy Wood, chief executive of Southwold-based brewery Adnams and board member for VisitEngland, said: "We feel that this has been a good budget for the hospitality, cultural, arts and tourism sectors.
"For my sector he's thrown more than a lifeline. He's thrown us a whole life raft.
"I guess the cherry on the top for me is that alcohol duties have been frozen across the board for the first time for 20 years."
Mr Wood praised the chancellor for providing the support that Adnams had lobbied for but said he could not take any responsibility for the chancellor's decision.
He added: "We think it has been a good budget for the whole of the East of England as well, because we are so heavily weighted towards hospitality and tourism."
Mr Wood also highlighted the freeze on fuel duty as "another step" in encouraging the staycation market.
However he said: "There are two sides to the same coin. From Adnams perspective we take sustainability seriously and want to see a transition away from the internal combustion engine."
- Business rates
The region's small and independent businesses have also been offered a raft of policies to get themselves reopened - with the dreaded burden of paying back the budget deficit falling instead to larger corporations.
Business rates holidays, reopening grants, and corporation tax of 25pc on companies with a profit over £50,000 all suggest that Westminster is finally rallying around the high street, said Andrew Mower, regional development manager for the Federation for Small Businesses.
He said: “Thousands of our small businesses are on the brink of collapse and thousands more are suffering from low confidence as cash reserves dwindle.
"They will welcome both the extension of flagship support schemes that have kept them going over the hardest year they have ever faced, as well as confirmation of new support measures around taxation, employment and cash grants.
“The continuation of business rates and VAT discounts is critical, and it’s important that those in supply chains benefit from them, not just those that neatly fit the definitions of frontline retail, leisure and hospitality.
"A lot will hinge on the tax announcements due later in March and the much-needed, delayed downward review of business rates."
- Personal finance
Tax freezes for individuals is a good way to raise funds without people losing money, said chartered accountants Lovewell Blake.
Partner James Shipp said: "The decision to freeze personal income tax allowances wasn’t a great surprise, as this is an effective way of raising revenue without anyone actually taking as dip in income.
"Holding allowances until 2026 was a surprise, taking the freeze beyond the next General Election. At first glance it is a fair measure, as it affects everyone; but, of course, higher earners who don’t qualify for the personal allowance are unaffected by that measure.
"Capital Gains Tax rates were left alone for now – but don’t rule out changes in the near future."
On self-employed income support, Mr Shipp added: "We have been lobbying the Treasury to include the more recently self-employed in the SEISS, so welcome the fact that those who have submitted a 2019/20 tax return will be included in the fourth and fifth tranche of support.
"Making the amount payable dependent on the extent of losses for the fifth tranche is sensible, targeting the support where it is most needed."
In years to come Rishi Sunak will likely be best remembered for bringing the furlough scheme to the UK - which he has once again extended into September.
Although such measures are welcomed, Westminster needs to look at the longer term issues facing the labour market, said Dr Jibonayan Raychaudhuri of the University of East Anglia.
Dr Raychaudhuri said: "Going forward, the economic recovery will not be a sharp recovery. Continued government assistance will be required for businesses. However, blanket government assistance for businesses cannot be sustained over the long run.
"Soon the government will need to come up with mechanisms to identify and support viable businesses only. This will inevitably lead to job losses.
"Aside from offering support through financial assistance and/or retraining in the short run, a long run objective for policy makers will be to identify and facilitate the creation of new and relevant jobs.
"Investing in an underfunded higher education sector is important, but it is not enough. Good jobs will only be created through a dialogue between governments (the funding side), businesses (the demand side) and HE institutions (the delivery side)."