With headlines clamouring that Rachel Reeves’ centrepiece would deter investment and the increased tax burden would make life harder for all, we talked to some members of the Norfolk Network, a local, influential business networking group, to gather their thoughts.
The accountant
Dr Peter Ellington from Triple Bottom Line Accountants isn’t pessimistic. He believes that the rise in employers’ National Insurance (NI) contributions isn’t detrimental to the nation’s finances. “This increase will cool down the economy. There’s an over-supply of labour in certain sectors, there’s an over-supply, for example in finance and accounting. Businesses will employ fewer people, but that’s not a bad thing as this will decrease wage inflation.” Ellington believes that outsourcing and an increased use of Artificial Intelligence must be addressed and included in companies’ plans for the future. “We have too many people looking for too few jobs.”
The SME founder
Lucy Mowatt, founder of Norwich-based SME, Method Marketing, has a different perspective. The company uses trusted freelancers to build its success. Norwich is a city with a large SME and freelance sector.
“Since I started my business in late 2018, things have been turbulent. First, there was Covid, for which I couldn’t get support because my business was too young and too small. Then there was inflation, energy bill increases and the cost-of-living crisis. All of which was neatly capped off by an impromptu General Election, which left businesses uncertain about the future.
“And I’m not sure this budget is going to help. While I’m not going to see a direct impact on my business because I have no employees, I’m expecting there to be a knock-on effect, with smaller clients having to reallocate budgets in a bid to cover their Minimum Wage increases and National Insurance contributions. And, unfortunately, marketing is often one of the first disciplines to be cut when budgets are tight, which could affect my business.”
The wealth manager
Richard Ross, financial planner for wealth managers Chadwicks, had this to say: “There is always hope for SMEs! Underneath all the doom and gloom pretty much all the businesses we deal with are doing well. We seem to have got into the habit of talking the UK down even when there is much to celebrate. This narrative is dangerous as it can easily become self-fulfilling.”
We discussed the lack of information about the UK shared prosperity fund, the body that was set up to replace EU funding for the UK. “The money that wasn’t applied anyway,” Ross says, “the money was there under the Tories, in that it was allocated…it was not managed properly.” He suggests: “The amount of money that was set aside never reached the intended recipients.”
We then discussed the prospects for Norfolk businesses, especially those involved in agriculture. Ross says: “The budget refers to changes in the inheritance rules and the Agricultural Property Relief that was set up to protect smaller concerns. “The family farm is increasingly under siege, and this will have an impact.”
On this point, in talking to the publication the Farmers’ Guide, GFW’s Andrew Entwistle goes further. “The suggestion that most family farms won’t be affected because they aren’t worth over £1 million is, frankly, unrealistic,” Entwistle says. “That …farmers are often asset-rich but cash-poor, with an average farm valued around £3 million. We’re now looking at inheritance tax bills of approximately £400,000.”
Ross firmly believes that “The new Government inherited a dire set of economic and social challenges that will take time to address. The budget shows a clear way forward and gives the business community a high degree of certainty over fiscal policy for the rest of the parliament. This stability will provide the confidence to invest, something that has been missing for much of the last decade”
Dr Peter Ellington believes that “compared to all of the scare stories, it [the budget] is a lot less scary than people were making out. What has been scary is that anyone reading the press could see the decision-making process being played out in public.” He firmly believes “the integrity of government has been eroded to some extent. If you go back 30 years or so, the people in the civil service and public duty would not have released this information.”
This budget is not simply about the nation’s finances. It is also vital to restore voters’ trust in government. Vague promises, hyperbole and lack of effective control over corruption and nepotism must stop and, maybe – hopefully – this budget is seeking to redress this imbalance.
