The Budget’s 2011

ONE of the UK’s leading business organisations are welcoming several short term measures to boost enterprise announced in the Budget, but they are arguing that more must be done in the long-term if small businesses are to truly drive economic growth and job creation.

The Forum of Private Business believes substantial measures on fuel duty – including an immediate cut and cancelling annual rises that had resulted from the introduction of the fuel duty escalator; should provide some cash flow relief for struggling small firms.

Equally, the Forum is welcoming a range of small business tax breaks including lower rates for businesses based in 21 new ‘enterprise zones’, increasing tax relief available under the Enterprise Investment Scheme and the decision to keep Community Investment Tax Relief contrary to recommendations made by the Office of Tax Simplification (OTS).

However, while the Forum also welcomes the Government’s continued commitment to reducing corporation tax overall, it is disappointed that small firms’ corporation tax bills are not being reduced by a similar rate to the higher level paid by big businesses, which the Chancellor is now slashing by 2% in April 2011 - double the reduction that had been planned – and from 28% to 23% by April 2014.

The Forum believes a number of opportunities have been missed for real root-and-branch tax simplification and radical reforms removing small firms from tax wherever possible – incentivising small businesses charged with leading economic recovery, rather than pandering to large companies. In its submission to the 2011 Budget the Forum called for the lower corporation tax rate to be cut to 17%.

In particular, the organisation is concerned that simply lowering from £18 to £15 the threshold price of goods shipped via the Channel Islands on which no VAT is payable will not stop large companies exploiting Low Value Consignment Relief (LVCR).

The Forum agrees with the pressure group Retailers Against VAT Abuse (RAVAS) that the real test is whether businesses that do not have offshore facilities can now compete on an equal basis with their counterparts on the Channel Islands. The answer for smaller retailers – including those selling CDs and DVDs which will still have to charge VAT – is clearly no.

It is important that the Government’s plans to work with the European Commission to limit the scope of the relief so that it can no longer be exploited for a purpose other than what it was not intended for stops the LVCR trade once and for all.

The Forum also believes that merging Income Tax and National Insurance (NI) into a single payroll tax is a step towards simplifying the UK’s complex tax system, and welcomes the announcement of a consultation into this, but is concerned that NI – a tax on employment at a time small businesses are charged with creating jobs - is still rising for most firms.

With the ability of small businesses to employ people under scrutiny, and a raft of employment legislation covering issues such as the default retirement age, pensions, parental leave and agency workers on the horizon for 2011, the Government’s plans for red tape have been keenly anticipated by business owners struggling to cope with the annual £12 billion cost of compliance bill.

Providing it produces measures that actually reduce small firms’ administrative burden, a review of all existing business laws is both welcome and long overdue - as is a specific review of health and safety law with a commitment to scrapping all unnecessary health and safety red tape.

In its capacity as Secretariat of the All Party group on Micro-business, the Forum is also backing the Government’s announcement that all firms with 10 employees and under – both start ups and established businesses - are to be given a 3 year holiday on incoming red tape.

However, the organisation is concerned that the moratorium will not apply to red tape stemming from EU law – which creates the majority of regulatory hurdles for small firms - and is also calling for similar regulatory relief for larger SMEs that have also been charged with creating the jobs set to be lost in the public sector.

The Forum is also welcoming the announcement of an additional 50,000 apprenticeships over the next 4 years, but believes more support is required to help entrepreneurs create these apprenticeships within their businesses, and proposed changes to make planning laws more business friendly.

“It was important a Budget heralded as being pro-enterprise focused on easing the dual burdens of tax and red tape – 2 of the biggest barriers to business growth and job creation facing small businesses. In that sense, we weren’t disappointed and this was certainly more than just a nod in the direction of UK SMEs. However, while there have been some definite steps in the right direction the Government could have gone further in reducing taxes and making the tax and regulatory systems more proportional to all small businesses so that they incentivise to entrepreneurship rather than act as a barrier to it. In summary, there are some good short-term measures here, but more radical changes are required over the longer term. The lessons of history show that you achieve rapid, widespread small business growth – and therefore economic growth - by removing entrepreneurs from the stranglehold of tax and red tape as much as is practically possible. While they will broadly welcome many of the Chancellors’ announcements, British business owners will be looking for much more in the way of real actions in the weeks, months and years that lie ahead.” said the Forum’s Chief Executive, Phil Orford.

The Forum’s Budget submission was based on its new Get Britain Tradingcampaign, which aims to raise awareness of the significant contribution played by small businesses in the UK’s economy and create trading conditions conducive to success.

John McDonnell MP, Parliamentary Convenor of the TUCG, which represents 10 national trade unions, said:- "This is a Budget for big business which ignores rising unemployment & refuses to halt the cuts in public services. We are sleepwalking into a deflationary spiral which will see real hardship for the most vulnerable in our communities. Osborne is cutting taxes for big business to their lowest level for forty years at the same time as implimenting savage cuts that will cut public services to the bone and bring into question the future of the Welfare State. To pretend that, "we are all in this together", is a very bad joke. Ongoing Government attacks on Pensions, Health and Safety, Pay and Employment Rights are not an acceptable price to pay for the profligacy of the banks."

The UK’s largest union, UNISON is calling for a change of direction and a budget for growth including a Robin Hood Tax. This tax on the banks would add £20 billion to the public purse; 20 times the measures that the Chancellor has announced to close tax loopholes. Twenty billion would save local services from shut down, keep children’s nurseries open, stop hospital’s shedding jobs and save adult day centres from closure.

UNISON's General Secretary, Dave Prentis, who said:- “Under the Tories our economy isn’t growing, but the dole queues are. The Government’s own Office of Budget Responsibility has downgraded the growth forecast by 0.9% since the Chancellor’s last budget. The carnage going on in the public sector was completely written out of the Chancellor’s budget. Osborne should have used this budget to right his economic wrongs. This no budge budget flies in the face of mounting evidence of the toll Tory cuts are taking on our economy and our society. The Chancellor is pinning his hopes on the private sector driving the recovery – but the evidence shows the private sector is not creating enough jobs to stop total unemployment from rising. Struggling families will be pleased that tax receipts have been used to stop fuel price rises. But with dole queues rising, and business and consumer confidence low, this is a warning to Osborne – he will not be able to rely on tax receipts to top up spending much longer. Osborne's over-hyped increase in tax allowances will in fact be worth less than £2.50 a week to the average basic rate taxpayer. This is more than cancelled out by the increase in VAT, which will cost the average family more than £3 a week, and other reductions in benefits, tax credits and services, which will cost families even more. This small tax giveaway will do nothing to help the 2.53 million people on the dole and struggling to find work. It is a drop in the ocean for millions of public sector workers hit by pay freezes. With inflation up to 5.5%, any benefit will swiftly be wiped out by higher prices. The Learjet levy is a token gesture. The mega-rich who can afford a private plane could pay a lot more towards our recovery. Instead, public sector workers are cutting back on food, vital healthcare such as dentists and prescriptions, and are still racking up high levels of personal debt. The poor, sick and vulnerable who did not gamble away our future are paying the price, as the public services they rely on disappear.”  Do you agree with these people? Let us know by emailing our newsroom.

New Communities given welcome...

LIVEROPOOL John Lennon Airport (JLA) along with the Airport Operators Association (AOA) – the trade association that represents UK airports, has welcomed the fact that the Chancellor has listened to submissions made by JLA and other AOA members and decided not to increase Air Passenger Duty (APD) for this year.

However Management at the Airport are warning that passengers still face the prospect of ‘double taxation’ and further increases in flying taxes when aviation enters the EU Emissions Trading Scheme in 2012; and also that the Chancellor may raise APD next year (2012).

APD in the UK is already up to 8.5 times more than the European average. Many European countries have either already abandoned their aviation taxes, or indicated that they will do so, due to the negative effects on their economies including:- Belgium, Denmark, Germany, Holland, Ireland and Malta.

Even with the freeze, the UK economy is already losing £750m in GDP and 18,000 jobs as a direct result of the recent November 2010 rises in APD, not to mention the thousands of UK tourism jobs lost because less people can afford to holiday here. Scotland alone is estimated to be losing over 1.2m passengers, 148,000 tourists and £77m in revenue in the next 3 years.

Craig Richmond, CEO of Peel Airports commented:- “We are pleased that the Government has listened to our concerns, however this is only the beginning and we urge anyone who travels by air, both on business or leisure, to continue to lobby Government further. Unlike the vast majority of European nations who experienced air passenger growth in 2010, the UK saw a decline. A ‘double taxation’ in 2012 will simply deter even more passengers from flying to and from the UK in future.”

Darren Caplan, Chief Executive of the Airport Operators Association, said:- “UK airports cautiously welcome the fact that Air Passenger Duty is not going up immediately, though would not support the delayed increase coming into effect next year. We now call on the Chancellor to emulate the decisions of European competitor nations to reduce or abolish APD in the UK. Additionally, many people aren’t aware that UK aviation is also joining the EU Emissions Trading Scheme (ETS) in 2012. This means that as things stand passengers will be subject to the costs of both ETS as well as aviation tax, so that holidaymakers and business travellers will effectively be paying double taxation next year. The Chancellor now needs to set out the government’s approach on reducing taxes on flying when the ETS comes in, otherwise passengers will simply be facing an actual tax increase later on in this 2011-12 financial year. There should be no double taxation of British aviation.”

UK air passengers fell by 3% in 2010, with the decline far worse than the majority of other European countries.

The Actors’ Studio, Seal Street, Liverpool

AFTER a fantastic inaugural year Write Now, Liverpool’s newest premier one act play festival, is back!  As well as e8 world premiere plays, Write Now, has exciting new events including Monologue Slam, a chance to showcase new acting talent in front of industry professionals and Ten Tall Tower Tales, set in an apartment block it tells 10 stories from 10 storeys, each five minutes long. Write Now also has a fantastic writing forum event supported by The Liverpool Everyman Playhouse Literary Department which is free of charge.

Festival Director Ian Moore adds:- “Write Now 2010 highlighted the need for a platform such as this. New writing, offering performers, directors and technicians the chance to showcase their talent is an absolute must for an ever developing arts industry.”

Write Now’s ethos of new writing and supporting talent has seen it achieve a great deal of support from acclaimed figures such as Pauline Daniels and BBC correspondent Roger Phillips.

Patron Pauline Daniels admits:- "New writing is the lifeblood of the industry. It's great that writers will get the chance to showcase their work as there are fewer and fewer opportunities to take risks and discover fresh talent."

"Pieces include Warrington based Natalie Hickman’s comedy Monkey Nuts and, particularly for the family audience, Jersey based, Liverpool born playwright Neil Walden returns to the city with Striker, a comedy adventure for everyone aged 4 and above.  Liverpool playwrights are also well represented with 3 pieces:- The Place Where We Stand, Spion Kop, Mrs Bojangles and Excess Baggage, which are all premiering. We’ve got something for everyone. Comedy, drama, farce, historical pieces and something for the kids in a great season of new writing.” added Ian.

For more information why not visit:- writenowfestival.co.uk.

JLA urges the Chancellor to rule out ‘double taxation’ on flying in 2012

LIVEROPOOL John Lennon Airport (JLA) along with the Airport Operators Association (AOA) – the trade association that represents UK airports, today welcomed the fact that the Chancellor has listened to submissions made by JLA and other AOA members and decided not to increase Air Passenger Duty (APD) for this year (2011).

However Management at the Airport are warning that passengers still face the prospect of ‘double taxation’ and further increases in flying taxes when aviation enters the EU Emissions Trading Scheme in 2012; and also that the Chancellor may raise APD next year.

APD in the UK is already up to 8.5 times more than the European average. Many European countries have either already abandoned their aviation taxes, or indicated that they will do so, due to the negative effects on their economies including: Belgium, Denmark, Germany, Holland, Ireland and Malta.

Even with the freeze, the UK economy is already losing £750m in GDP and 18,000 jobs as a direct result of the recent November 2010 rises in APD, not to mention the thousands of UK tourism jobs lost because less people can afford to holiday here. Scotland alone is estimated to be losing over 1.2m passengers, 148,000 tourists and £77m in revenue in the next 3 years.

Craig Richmond, CEO of Peel Airports commented:- “We are pleased that the Government has listened to our concerns, however this is only the beginning and we urge anyone who travels by air, both on business or leisure, to continue to lobby Government further. Unlike the vast majority of European nations who experienced air passenger growth in 2010, the UK saw a decline. A ‘double taxation’ in 2012 will simply deter even more passengers from flying to and from the UK in future.”

Darren Caplan, Chief Executive of the Airport Operators Association, said:- “UK airports cautiously welcome the fact that Air Passenger Duty is not going up immediately, though would not support the delayed increase coming into effect next year. We now call on the Chancellor to emulate the decisions of European competitor nations to reduce or abolish APD in the UK. Additionally, many people aren’t aware that UK aviation is also joining the EU Emissions Trading Scheme (ETS) in 2012. This means that as things stand passengers will be subject to the costs of both ETS as well as aviation tax, so that holidaymakers and business travellers will effectively be paying double taxation next year. The Chancellor now needs to set out the government’s approach on reducing taxes on flying when the ETS comes in, otherwise passengers will simply be facing an actual tax increase later on in this 2011 to 2012 financial year. There should be no double taxation of British aviation."