In his Autumn Budget the Chancellor announced changes that will affect small and medium enterprises up and down the country.
Mark Ellis, Founder and Executive Director at Ellis Whittam provides commentary.
Ellis Whittam (EW), provides HR, employment law and health and safety support to more than 20,000 employers across the UK.
So, EW is a sort of barometer for the economy.
In good times we support clients with hiring new members of staff, training, buying and selling businesses and keeping people safe as a business grows.
In more challenging times we support with changing terms of employment, redundancies, dismissals and a growing number of Employment Tribunal claims.
More than 15,000 of those employers we support have a presence on the high street – pharmacists, hairdressers and retailers.
For some time now, the EW economic barometer has been pointing towards turbulent weather.
Founder and Executive Director, Ellis Whittam
In particular, retail and manufacturing clients have been having a hard time. A dangerous cocktail of Brexit uncertainty, the explosive growth of online sales, business rates and a lack of business confidence has meant that employers have been treading very carefully.
However, despite the uncertainty, the economy has been behaving well – but it’s sitting on a cliff edge and could easily fall.
Decisions
That’s why this budget is so important.
Make the wrong economic decisions and combine that with a messy Brexit and I expect another recession.
Make the right decisions – assuming some certainty about the outcome of Brexit ASAP – and we can look forward to several years of strong growth and continuing low unemployment.
As in life, what matters is confidence.
If employers and entrepreneurs are feeling confident, the economy will do well, employment will be high and wages will grow. Happy days. Things will spiral upwards, at least until the bubble bursts!
How does the Chancellor improve business confidence? He can do so by cutting costs to business, encouraging innovation, helping to improve productivity and supporting entrepreneurs.
Headline Figures
This budget goes some way to helping in those critical areas.
A one third cut in business rates is certainly great news for retailers. It won’t make consumers stop shopping online and flock back to the High Street but it will give a boost to retailers in the short term.
£675m co-funding with local councils for a future high street fund is forward thinking and welcome. We must accept that in the medium to long term the High Street won’t look anything like it does today. It will be a place to experience services, for bespoke retailers and a place to eat, work and live. Those plans announced in the budget will help manage that evolution.
The proposed tax on the UK revenues of large global online sellers goes some way to levelling the playing field and is a positive move.
A headline sum of £1.6 billion to support tech and innovation is encouraging – but we need to read the small print. On face value, this sort of investment will fuel entrepreneurship where the UK can – and must – trailblaze post Brexit.
Preserving Entrepreneurs Relief for those high risk-taking entrepreneurs, whose businesses employ many people if successful and drive the economy, is a sensible move.
The combination of extending stamp duty exemptions, increasing national minimum wage, freezing fuel duty and increasing the personal allowance, should help to increase consumer confidence.
Difficult Balance
The Chancellor had a difficult balancing act to achieve at a time of great uncertainty. On balance, he played a clever hand and the budget should be reasonably good news for employers, innovators and entrepreneurs. With the Brexit storm clouds hanging over everybody, it goes some way to boosting both consumer and business confidence, for now.
All in all, 7.5/10. With beer duty frozen, I’ll drink to it.
Mark Ellis
Founder & Executive Director, Ellis Whittam
