Following today’s budget announcements, Ian Sandison CEO of Cambridge BID comments:
As the high street economy in Cambridge plans to open up initially from April 12th and then more widely from May 17th and June 21st businesses were looking for further support from the Chancellor. Whilst some of the announcements are to be welcomed, the next 12 months will still be tough for many and once again Cambridge misses out when it comes to regeneration funding and is clearly not seeing much benefit from the levelling up agenda.
Business rates
It is pleasing that the Chancellor today announced a further short extension of the 100% business rates relief programme until the end of June and then a 2/3rds discount from then until the end of March 2022 for many non-essential businesses, shops, bars, restaurants and hotels that were forced to close from January 5th 2021. This will allow businesses to use these savings to invest in the reopening of their business, feel confident they can afford to bring some staff back to work, purchase new stock and pay their day to day rent and other bills. This tax is widely regarded as being out of date, regressive and disproportionately expensive. Currently a small business with a rateable value of £12k pays no business rates, but one that could be smaller in size but in a more expensive location with a slightly higher rateable value of £15k will pay around £7,500 per year in rates. Along with many other business groups, BIDs around the country have been calling for a full review of this outdated tax and I repeat this today.
Furlough Scheme
This scheme has been widely used by all sectors of the business community and has resulted in many jobs being saved especially from within the retail, hospitality and leisure sectors that dominate our High Street. The extension of this scheme until September allows businesses to return their staff to work in a measured and planned manner and gives these loyal employees increased certainty of their employment status. Businesses will have to evaluate carefully how affordable the scheme is as they will be required to contribute upto 20% of the employee costs from August but this extension is helpful. It would have been good for the Chancellor to announce plans to make it easier for employees in this sector to enter the UK labour market. Many of these have left the UK and returned to their families during the crisis, sadly this sector is not considered essential in the governments new points based immigration system.
Reduced rate of VAT for hospitality
The hospitality industry has been very hard hit by the pandemic, many businesses have remained closed for the whole crisis, some for over 6 months so the extension of the current discounted rate of 5% until the end of September will be welcomed. Although hospitality businesses can open for outdoor service from April 12th, many in the city of Cambridge do not have this external capacity so whilst we work with the City Council on providing more of outside seating many will not be able to effectively open until May 17th and then with social distancing requirements remaining in place.
Restart Grant
The various COVID 19 government grant schemes have been very helpful and allowed many businesses to survive over the last 12 months. The initial grant schemes did though discriminate against Cambridge businesses that pay higher rates. Over 400 businesses with a rateable value above £51k did not receive grants in Lockdown 1. Thankfully lobbying by BIDs and other business organisations meant these business do qualify for grants from lockdown 2. These new grants of upto £6,000 for non-essential shops and up-to £18,000 for hospitality and leisure businesses will be welcomed and again contribute to paying essential bills and allowing businesses to plan to reopen.
New Towns deal
It is hugely disappointing to see that once again Cambridge misses out on this type of support. Over the past few years close to £4bn has been pledged to over 300 town and city locations including Peterborough, Milton Keynes, Ipswich, Stevenage, Colchester, St Neots, Bedford, Colchester, Kings Lynn, Lincoln, Northampton and Norwich but nothing for Cambridge. Whilst the wider city economy remains strong, our city centre was challenged before Covid-19 and with our dependency on international tourism which is not likely to return to pre-covid levels for a number of years then this large capital regeneration funding is really essential.
For more information on the 2021 Budget, please click here
