Posts Tagged 'national insurance'

What does the Budget mean for Brighton & Hove?

After 13 years of a Labour government, their out of control spending has finally come home to roost. Former Chief Secretary to the Treasury – Liam Byrne – was quite right to say in that infamous note to his successor that “there’s no money left.” It would be nice if he could also offer an apology to the nation for their profligacy, which we are now all having to pay for.

It is now up to the coalition government to sort out the mess and, in my view, they are quite right to get on and tackle it straight away. Leaving the debt interest to rise for another year would be a complete waste of public money and would only make the situation worse.

I have always said that there are going to be some tough decisions to be taken whoever won the general election in May and, to his credit, George Osborne had the courage to take some of those yesterday. The public sector pay freeze will be difficult for staff at the Council but I’m pleased that he has decided to protect those on incomes below £21,000. And I think that the review of public sector pensions has become unavoidable given the taxpayer liabilities that have been building up over the last few years.

But the tough choices were also mixed in with some really positive proposals. For example, thanks to our sound financial management over the last 3 years, we are going to be able to deliver on our pledge to Brighton & Hove’s residents to freeze council tax for next year. This Conservative Administration has delivered the lowest council tax rise in the history of the council for 3 years in a row now and has saved £30 million of taxpayers’ money in the process. A freeze next year will be a real boost for residents who are struggling to pay their bills, as will George Osborne’s decision to take almost a million people out of paying income tax altogether by raising the threshold.

There was also some really good news for businesses. The cut in Corporation Tax will be hugely welcome, as will the partial reversal of Labour’s proposed ‘jobs tax’ – the employer National Insurance contributions. It is crucial that we allow the private sector to prosper, both locally and nationally, as this is where the future economic growth – and taxation to support vital public services – will come from.

We will now be looking at George Osborne’s statement in more detail to see how it affects the Council’s finances. However, as always, I will do my utmost to ensure that frontline services are protected.

Advertisements

National Insurance hike would hit Brighton & Hove Hard

The Government’s proposed 1% rise in National Insurance would not only hit residents hard, it would also be another body blow for businesses in Brighton & Hove, at a time when they can least afford it.

At the City Council we have calculated that if it goes ahead, the rise will cost us – as the City’s largest employer – an extra £1.5 million a year. That is £1.5 million of local council tax payers money going straight back into Treasury coffers to pay off the massive debt they have racked up over the last 10 years or so. And at a time when our budget is under such pressure, it is £1.5 million we can ill afford to lose.

Councils wouldn’t be the only public sector organisation to lose out – nationally, the NI increase would cost the NHS £208 million, schools would have to fork out £66 million (equivalent to something like 2,000 teachers) and the Police would face an increased tax bill of £43 million.

Paying off the national deficit has to be the top priority for whichever Government is at the helm next month. But bringing in another tax on jobs (which would hit both private and public sector employers and employees) is surely not the way to go about it. The only long-term way of addressing the underlying structural deficit is to make it easier for businesses to set up and expand. The private sector generates the wealth which enables us to have an NHS, state schools, policing and roads. Sadly, the parties of the Left seem unable to grasp this most basic of economic truths.

Brighton & Hove’s small businesses face triple tax whammy

Small businesses have taken a real hit recently due to the effects of the recession – difficulties in obtaining credit, less demand for goods and services etc. I think that in Brighton & Hove, by and large, they have weathered this storm very well so far but I do have some real concerns for the coming months.

The main reason for this is that a whole catalogue of factors are coming together to put huge pressure on our local firms. Firstly, VAT went back up to 17.5% on 1st January, pushing the price of goods back up in the shops. Secondly, employer and employee National Insurance contributions are both set to increase by 1% next year which will put huge pressure on local employers and is hardly likely to encourage job creation (I am pleased that David Cameron has indicated that if he wins the general election he will look to scrap at least part of this rise).

But perhaps most worrying of all is the Government’s business rate revaluation, due to come in force from April this year. Nearly 60% of our business ratepayers are set to have an increased bill and around 43% are due to be capped at 5% of 12.5% because their increases are so high. Government publicity has made significant noises about 60% of businesses nationwide experiencing decreases in rates but the opposite is true here in Brighton & Hove. The transitional scheme has been taken up by around 7% of our ratepayers but has merely created a potential time bomb, as businesses will be faced with paying back what they deferred last year, PLUS up to 12.5% increased rates.

I have recently written to the Government Minister – John Denham – on this matter asking him to give areas such as Brighton & Hove some extra support to get the City’s small businesses through this difficult period. We recently put forward a proposal as part of the Sustainable Communities Act which would give Council’s greater flexibility than we have now to offer rate relief to particular businesses and hopefully they will act on this.

A further factor which is adding to the pressure on our smaller independent retailers is the impact that the big supermarket chains are having. They are moving into the City in increasing numbers and under current planning regulations, Councils are powerless to do anything about it.

In the next few weeks I will be looking to build upon the Business Lifebelt Scheme which the Council launched last year which offers practical assistance to a range of businesses and sectors in the city, aiming to help them survive the economic downturn.

Small businesses are crucial to the continued prosperity and well-being of the whole City and I am continuing to look into any ways in which we can help them.


council twitterfeed

September 2019
M T W T F S S
« Jul    
 1
2345678
9101112131415
16171819202122
23242526272829
30  
Advertisements