What Jeremy Hunt’s Budget did and didn’t do for British businesses
BUSINESS was impressed with yesterday’s budget, designed to appeal to the city.
London stock markets rose and the pound rose, indicating that markets were happy that Jeremy Hunt was disciplined.
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But the head of the British Chamber of Commerce, Shevaun Haviland, said there were no big announcements that would help “push the dial” for businesses.
Business leaders were disappointed that their pleas to reduce business rates burdens were once again ignored.
Property taxes – set to rise 6.7 percent next month – are a blow to major retail chains and give online retailers an unfair advantage.
Currys boss Alex Baldock called it “bitterly disappointing”.
He lamented: “It is no wonder that more and more shops are having to close their doors.”
Retailers were also furious that their campaign to abolish tourist tax for foreign buyers was ignored.
Around 500 leaders – including bosses from M&S, Primark and Burberry – called on the Chancellor to reinstate tax-free shopping for tourists, claiming it would cost the economy £1.1 billion.
Pub chains welcomed the drinks tax freeze but said it would have been more helpful if Mr Hunt had listened to calls to cut VAT.
Young’s boss Simon Dodd said the government had “set it aside rather than implementing much-needed long-term support for the hospitality sector”.
But shares in his company – and in Weatherspoons and Marston’s – rose.
The auto industry complained about a lack of support to stimulate demand for electric vehicles, while sales fell.
It wanted lower VAT on electric motors and public charging points to make them more affordable.
But it yielded nothing.
Vauxhall said the Budget has not delivered “the acceleration needed to prevent the UK’s transition to electric vehicles from stalling”.
But the Chancellor gave handouts to the arts sector, which recently provided an economic boost.
He selected stars Idris Elba, Orlando Bloom and Keira Knightley who are currently filming in Britain.
He announced tariff cuts for film studios, theaters and museums – with £26.4 million for the National Theatre.
The Chancellor surprisingly increased the threshold for small businesses to register VAT from £85,000 to £90,000.
But tax experts called the changes minuscule and pointed out that Britain still has the highest threshold in Europe.
Michelle Liu, who runs Chinese takeaway Mama Chen’s in Romford, east London, thinks an increase to £100,000 would have been more useful.
She said: “While this is a step in the right direction, it will help relatively few small and medium-sized businesses.”
Meanwhile, the Chancellor confirmed plans to launch a UK ISA – and a new exchange for private companies to trade their shares.
The measures are intended to make it easier for companies here to get support from British investors.
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BRICK FALLS
BRICKMAKER Ibstock saw profits fall 71 per cent after costs rose and house building slowed.
They cut 300 jobs – 15 percent of the workforce – and closed two factories to cut costs.
Annual profits fell from £105 million to £30 million and turnover fell from £513 million to £406 million.
Boss Joe Hudson said there is “significant unmet demand for new-build homes” but demand from developers is subdued.
Figures show that the construction of new homes has increased for the first time since July 2023.
RETAIL HIGHNESS
So-called ethical retailers John Lewis and Co-op were playing catch-up to their rivals in raising wages yesterday.
John Lewis has increased the minimum wage for department store staff and Waitrose workers by ten percent to £11.55 an hour.
In London the rate will increase to £12.89.
The Co-op, meanwhile, has announced it will increase its minimum wage to £12 per hour, and to £13.15 in London.
Both retailers are lagging behind their rivals. Asda pays £12.04 per hour and Tesco £12.02, with higher rates in London.
THE maker of Vimto expects to sell 25 million bottles of the fruity drink during Ramadan.
NicholsI, which also owns Slush Puppie treats, reported that sales rose 3.5 percent to £170.7 million, while profits rose 75 percent to £24.3 million.
888 TIME CALLS ON DREAM FOR US
WILLIAM HILL owner 888 has admitted defeat and pulled out of the US after bosses realized it would need a lot more money if it was to become profitable.
Boss Per Widerström said 888 had faced stiff competition from the likes of Fan Duel and Draft King and said the “requirement for scale means huge investment is needed”.
He said it is unlikely it can grow its U.S. business fast enough and that it will update investors next month.
As a result, 888 is cutting ties with the owner of Sports Illustrated magazine, which had allowed the company to use its brand in the US for online sports betting and casinos.
888 will have to pay a total of £40 million in costs over the next five years to get out of the deal.
However, the company said it would save around £5 million this year and next.
THE GREAT LOSS OF THE CAPITA
Struggling outsourcer Capita suffered another major blow yesterday after its shares fell by a fifth following huge losses.
The outsourcer, which provides software and IT resources, suffered a cyber attack last March, compromising the data of more than half a million people.
The company reported a loss of £106.6m, after £61.4m in profits the year before.
Chief Adolfo Hernandez said it will “quickly reduce” costs.