A recurring theme of the Budgets presented by the previous Chancellor of the Exchequer, George Osborne, over the last few years has been the need to build a resilient UK economy.
In presenting his first (and last) Spring Budget last week Philip Hammond continued this theme using highly emotive words such as “foundation” “underpinned” and “resilience” to deliver a Budget focussed on keeping Britain at the cutting edge of the Global Economy and setting the stage for our Global Future.
The economic headlines for UK PLC continue to show a positive trend – growth is ahead of forecast although expected to fall in 2018, unemployment is now below 5%, and all of this has been underpinned (yes, that word again) by an interest base rate that was reduced further to 0.25% in August 2016.
All of this at a time, however, when there is continued concern over the impact of Brexit, hard or soft, and significant uncertainty over the trading relationship with our American cousins.
In the context of this, it is pleasing to see the significant progress that has been made over the last year by the local companies highlighted in our survey and the contribution that North Derbyshire has made to UK PLC. But if the same local companies are tasked with providing the foundation for future growth what would support these companies further?
- A strong Bank of England prepared to hold its nerve, as inflationary pressures mount, over interest rates and policy decisions and in doing so remove any uncertainty over investment decisions.
- A competitive rate of Corporation Tax – from 1 April 2017 the rate of Corporation Tax reduces to 19% irrespective of the size of business, and results in the UK having one of the most competitive rates of company tax within the G7 Group of countries. Would a post Brexit reduction to 15% provide companies with additional resources to innovate and grow?
- Measures to reduce the productivity gap – an extension to the Annual Investment Allowance limit from £200,000 coupled with a simpler and more accessible system of claiming research and development tax relief would help local companies to improve efficiency and productivity.
- A reduction in the administrative burden – Making Tax Digital is on the horizon for companies in 2020 – but wilis deliver simpler and quicker administration or just more red tape ?
An interesting wish list – only time and possibly the Autumn Budget will tell.
By Chris Humphreys