Commentator were last night divided on the impact of Chancellor George Osborne’s Budget. Moves such as cutting fuel duty, raising the tax threshold and major incentives for businesses and entrepreneurs have been set against continuing above-inflation rises in alcohol and tobacco duty, rising National Insurance contributions and downward predictions in overall economic growth.
Chris Mundy, tax partner at accountants and business advisers Grant Thornton based at the Oxford Business Park, said: “The welcome change has been the cut in fuel duty and the introduction of the fuel stabiliser.
“From what was going to be an increase of 6p a litre we will instead see it fall by 1p a litre.”
Mr Mundy also greeted the doubling of entrepreneur tax relief to £10m, cuts in corporation tax and extension of research and development tax credits as being a boost for county firms.
He added: “Mr Osborne has clearly made a number of moves to make the UK a more competitive place to do business.
“But what he has not done is change the 50 per cent top tax rate which has to be paid by the people who run companies and some of them will continue to find other countries a more attractive place to do business.”
Chris Lee, a partner in the business tax team at Oxford accountants James Cowper, said: “The Budget intends to help businesses and individuals, but for all George Osborne’s huffing and puffing it does little to disguise an increasingly gloomy economic picture, which sees growth falling to 1.7 per cent this year along with high inflation.” Oxford East Labour MP Andrew Smith was also dismissive of Mr Osborne’s Budget.
He said: “There is an awful lot of giving with one hand in this budget and taking away with lots and lots of other hands. The Chancellor has already taken too much money from families and is now expecting them to be grateful when he gives a tiny fraction back.”
However, the announcement of a £250m shared equity scheme for first-time home buyers was warmly greeted by Mark Charter, of Oxford estate agent Carter Jonas. He said: “Boosting the market at entry level in this way can only help to release the pressure on supply.”
And Iain Nicholson, director of the Oxfordshire Town Chambers Network, was positive about some of the Chancellor’s business incentives.
He said: “Oxfordshire businesses will want to see how the measures announced will work in practice but there will be a welcome for much of what the Chancellor has had to say.
“What is key is that the focus on enterprise, jobs and growth he talks about produces real change.”
Pupinder Ghatora, owner of the Woodlands Pharmacy in Botley Road, Oxford, said: “It’s tough out there with the NHS rationalising drug provision, and cutting between £10,000 and £20,000 off the bottom line every quarter.
“But a tiny help for us will be the scrapping of the fuel escalator. We employ four van drivers, out delivering every day, and fuel costs are spiralling."
The “no change” in alcohol duties announced by the Chancellor will in reality translate as a 7.5 per cent increase from next week.
That is because he did not scrap the so-called beer escalator. And the beer escalator spells rises of two per cent above inflation.
Hamish Stoddart, managing director of the North Aston-based Peach Pub Company — which owns 13 pubs including The Fishes in North Hinksey and the Fleece in Witney — said: “The duty hike will come on top of price increases of about five or six per cent from suppliers that always come about this time of year. So the total increase for the customer could be about 20p a pint.”
He added: “It makes it more difficult for people to enjoy themselves.”
However, he said the increase in threshold for income tax would help the company’s part-time workers.
But there was good news for Oxfordshire as the Chancellor announced a £100m boost for science, which will include £10m to ensure four instruments planned for a new phase of the Isis neutron source at Harwell will go ahead.
Funding for the first instrument, Chipir, to test electronics used in the aerospace and computing industry, was confirmed by the Minister for Science, David Willetts, earlier this month. The new funding means three further instruments, Imat, Larmor and Zoom, can go ahead, with work starting next month.
Harwell will also benefit from another £10m to start the National Space Technology Programme at the International Space Innovation Centre.
Prof Keith Mason, chief executive of the Science Technology Facilities Council, said: “We welcome this investment in our scientific facilities and capabilities at the Harwell Science and Innovation Campus, which will help us promote economic recovery.”
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