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Yesterday’s budget was an opportunity for the government to invest and support businesses and town centres which have been hit hard by the pandemic and are still very much on the road to recovery. There was little mention of investment in town centre infrastructure to help them grow and evolve into community hubs and although there was investment in local projects (part of the levelling-up fund), London will be receiving a lower share of this money, despite the devastating impact COVID has had on its businesses, jobs and the economy. It was hugely disappointing that there was no commitment to fundamentally overhaul the business rates system, critical for the vibrancy of town centres and to encourage businesses to thrive.
While we welcome the 50% discount in business rates for the next 12 months for businesses in the retail, hospitality and leisure sectors, which will benefit over 50% of businesses in Kingston town centre, these measures are short lived and do not address the significant flaws in the current system which are a barrier to creating a diverse town centre and encouraging new business models. Sadly, there was also no extra funding to support businesses still on the long journey of recovery.
The budget also included forecasts for UK economic growth. The Office for Budget Responsibility (OBR) expects gross domestic product (GDP) to expand by 6.5% this year followed by 6% in 2022, returning to pre-COVID levels. However, the OBR expects inflation to rise to an average of 4% over the next year (3.1% in September). Also announced were increases for those on minimum wage and an increase for apprenticeship funding, vital for creating a highly skilled and productive economy.
Yesterday’s budget gives businesses a sigh of relief with incentives and reductions around business rates but these are short-term and we will continue to lobby for reform in this area. Despite promising forecasts from the OBR we are in a climate where cost of living is rising and businesses are struggling with supply chain issues and costs which means many businesses will still face challenging months ahead.
Kirsten Henly
Chief Executive, Kingston First |
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