The SME response to the Summer Budget

Plumbing entrepreneur Charlie Mullins believes England’s ‘nation of shopkeepers’ can play a more central role in growing the economy after the Chancellor announced changes to the Sunday trading regulations in the Budget.

“The Chancellor’s ‘Open All Hours’ attitude really excites the free-marketeer in me and will help the high street to emerge from a 1950s time warp.  We’re often portrayed as a nation of shopkeepers and now is their time to break the shackles of outdated trading rules to have a more central role in the growth of the economy.

“Just like Ronnie Barker’s ‘Arkwright’ character from the BBC sitcom, George Osborne knows exactly how much he has in his till and what he has to do to fill it.

“One of the key principles of growing a business is to sell more to more people – this move hits the nail on the head and shows that we have an entrepreneurial Chancellor.

“It makes no sense to me that firms pay rent and rates on their business premises, along with all the other overheads, but come Sunday there are laws stopping some businesses from actually being open.  In a free economy that’s madness and a situation that was long overdue for change!

“If you’re brave enough to go into business, large or small, there shouldn’t be any regulations restricting when you can sell your products or services, end of story.

“It’s good for the economy and will help create more and different working hours, which for many people will allow them to better juggle work and family commitments.  It’s a complete winner and shows that Britain is open for business, whatever day of the week it is!”

Jo Causon, CEO of The Institute of Customer Service

“Longer opening hours may be welcomed by consumers whose lifestyle means they demand greater choice and convenience to shop, but being ‘open all hours’ will not necessarily guarantee that customers get the shopping experience they want.

“Britain is already renowned for a long-hours culture and by encouraging more time ‘on the clock’ we could create a nation of disgruntled employees who feel compelled to put the hours in.

“The fact is that great customer service is not just about opening the doors earlier, for longer.  It’s also vital to create an environment that frontline staff want to be part of, so they are engaged enough to provide the sort of quality service that encourages customers to return again and again.  Only when there is a clear link between employee and customer needs will we have a chance of boosting the economy and closing the productivity gap.”

Stephen Springham, Head of Retail Research, Knight Frank

“The worst kept secret is now out.  As widely predicted, the Chancellor has confirmed in his Budget that Sunday trading laws are to be relaxed. Will retailers embrace it? Yes – most of the leading multiples will see this as an opportunity to open their stores for longer.

Will relaxing the laws further provide a major fillip to overall retail sales? Will there be substantial economic benefits? Probably not. There is limited empirical evidence to suggest that liberalising store hours drives incremental growth to retail sales.

The same level of spend is merely dissipated over a wider/longer trading period. But this misses the point. Extending Sunday opening hours gives consumers what they crave and value most – convenience and greater choice. ‘Browsing periods’ on a Sunday morning, when customers can walk stores but not buy anything, are farcical in this day and age, as is the last minute dash to catch a store that closes its doors abruptly at 4.00 pm. You can shop online at any time on a Sunday, why not too in store?”

Howard Sears, managing director of the venture capital firm, Astuta

“For British business, this was a frankly barnstorming budget.

“Confidence among UK businesses is already strong but these latest reductions in corporation tax will supercharge it.

“As well as sending out an important message to UK business owners, the reduction in corporation tax will give them a strong competitive edge and the all-important breathing space to grow.

“Importantly, the corporation tax a country charges is integral to the due diligence companies undertake when deciding where to set up or expand. Again, this will make the UK more attractive as a global business hub.

“The Government’s ongoing clampdown on non-doms will be welcomed by many but if it disincentivizes internationally mobile entrepreneurs, it could have an adverse effect over the longer term.

“A balance has to be struck between taxing people at the right level and keeping the UK attractive to entrepreneurs from around the world, although the attractive corporation tax cuts will go some way to mitigate this.”

Paul Shepherd, marketing director, Hello Soda

“As a tech company based in Manchester, we’re excited the councils will have more powers. Electing a mayor will help ensure these promises are kept and fuel up the ‘Northern Powerhouse’. Better transport links, oyster-style ticketing and devolution of powers throughout the North and the country will improve nationwide tech and enterprise hubs, employment and our economy.”

Guy Ellison, Head of UK equities at Investec Wealth & Investment

“We’ve seen a sell-off in house builders, estate agencies and those linked to finance within the buy-to-let market as the government will start to taper down the amount of mortgage tax relief that can be claimed by buy to let landlords to the minimum tax rate from 2017. National living wage will see an 11% uplift from £6.50 to £7.20 next April for those on the minimum wage, weighing most heavily on the biggest employers such as retailers, leisure and support service companies.

“Businesses will rejoice at a further reduction to corporation tax to 18 per cent in 2020 which will maintain and indeed further the UK’s position as having one of the lowest corporate tax rates of any developed nation. The effect of a reduction in Bank levy over six years should be monitored closely; whatever is left of the levy will only be focused on UK balance sheets, but the reduction and narrower focus will be offset by an 8 per cent incremental taxation on bank profits from January 2016. This could potentially hit domestically-focused and ‘challenger’ banks hardest.”

Mark Tighe, managing director of capital allowances specialists Catax Solutions
“The Chancellor has shown he is committed to helping businesses grow, however, he has fallen short in his promises to support SMEs when it comes to raising the annual investment allowance. With the cap set to fall back to £25,000 at the end of the year, numerous business leaders have already recommended the allowance to be set above the current level of £500,000 – but the Tories haven’t listened.

“The Chancellor’s apparent ‘laser-like focus’ on productivity is somewhat misguided and it is now crucial Mr Osborne reevaluates the way in which he intends to help SMEs continue to spend and grow. SMEs have been star performers in the UK economy in recent months and they deserve greater support, as pledged ahead of the election in May.”

Ed Relf, CEO, Laundrapp

“It was tumbleweed for technology start-ups in George Osborne’s Budget today. If the UK is to take further strides towards shaping the ‘sharing economy’ in Europe, entrepreneurs must receive further support from the Government. Tax incentives to support the purchasing of larger capital expenditure will go a long way to help entrepreneurs grow the on-demand ecosystem, offer more jobs and help the wider British economy remain one of the fastest growing in the world.

Projects to support innovation across Britain, not just in London, are essential. By adding local ‘Enterprise Zones’ and boosting the annual investment allowance sounds promising for the growth of SMBs. This should also help form local innovation hubs to facilitate the nationwide expansion of both “sharing” and “on-demand” services.

There also should have been a pledge on the continuing rollout of mobile 4G connectivity which still only covers approximately 55 per cent of the UK as well as substantial speed increases from the average of around 15 Mbps and a continuation of the drop in 4G price plans.

British entrepreneurs have “big ambitions”, it remains to be seen whether this ‘big Budget” will pave the way for further innovation.”