CHANCELLOR Alistair Darling pun-ished the wealthy with a tax hike on£1m-plus house sales yesterday, as heinsisted only Labour could be trustedwith an economy “at a crossroads”.

In a nakedly political Budget, MrDarling unveiled a £2.5bn “growthpackage” – for small businesses, thejobless, pensioners and housebuyers –insisting spending must continuerising until recovery was locked in.

With the general election likely to bejust six weeks away, the Chancellorurged voters not to risk thatrecovery on a Conservativeparty hell-bent on immediatecuts that would be “wrongand dangerous”.

And he told the Commons:“I am not prepared to takethat risk. We have worked toohard as a country to comethrough this recession tothrow it away now.”

Mr Darling also announcedeye-catching measures to freemany firms from paying businessrates, an extra 20,000 university placesand doubled the stamp duty holidayfor first-time buyers, to £250,000.

And he promised to shift 15,000 CivilService jobs out of London over thenext five years – and a further 13,000“in the long term” – to areas such asMerseyside.

But, in a Budget also designed tocalm the jittery financial markets, he

published details of £11bn of plannedsavings, to answer criticism that theGovernment is hiding the painful cutsto come from 2011.

The “efficiencies” are startling athealth (£4.35bn) and education (£1.1bn)and the detail vague, with talk of cut-ting staff sickness and consultancycosts. That will raise questions abouthow ministers can “protect front-lineservices”, as promised.

In a passionate response, Conservat-ive leader David Cameron insisted theChancellor was still failing to deliver a“credible plan to deal with Britain’srecord debts”.

And he told MPs: “Like every Lab-our government before them, they’ve

run out of money. Andthey’re leaving it to the nextConservative government toclean up the mess.”

Mr Cameron also tauntedMr Darling that the stampduty cut for first-time buy-ers had been stolen from theTories – as had the an-nouncement of tax hikes onsuper-strength cider.

Lib-Dem leader NickClegg said both Labour and

the Conservatives were “in denial"about spending cuts, adding: “ThisBudget was a political dodge, not aneconomic plan.”

The Tories were also quick to pointout that personal allowances had beenfrozen, instead of rising in line withinflation, in a classic “stealth tax” thatleave the average taxpayer up to £40worse off.

Confirming reports of a £2bn “green

infrastructure fund”, Mr Darling saidthe first projects to benefit would be intransport and offshore wind power,where Britain was “already a worldleader”.

In an announcement likely to in-terest the Port of Liverpool, he set up a£60m fund to develop ports keen tohost companies making and assem-

bling wind turbines. Mr Darling alsocheered motorists by staging a planned3p increase in fuel duty over tenmonths, with only a 1p hike from nextmonth.

He cut his borrowing figure for2010-11 by £13bn, to £167bn – but netdebt is still forecast to rise to aneye-watering 75% of GDP in 2014-15.

Darlinghitsrichwithstampdutyrise

Inside ourBudgetspecial:

www.ldpbusiness.co.ukLDP

budget

Bankspledgeanextra£94bnforsmallbusinessesPART-NATIONALISED bankshave pledged £94bn in extraloans for struggling busi-nesses in the coming year, theChancellor said yesterday.

Alistair Darling said RoyalBank of Scotland and LloydsBanking Group have agreed tolend nearly half the total

amount to smaller companies.RBS, which is 84% taxpay-er-owned, said its deal withthe Government involved ex-tending £50bn in gross lendingto firms. Lloyds has agreed tolend £44bn to firms in thecoming year under the newagreement.

Last year, the banks missedtheir required business lend-ing levels as recession-hit cus-tomers looked to repay debt.

Lloyds’ target will remainat £3bn for the coming year,while RBS has seen its com-mitment reduce to £8bn, asthe target was balanced over

two years after the 2009 levelwas increased from £9bn to£10bn.

The Budget document saidthe new agreements were leg-ally binding but stopped shortof outlining specific penaltiesif the banks failed to comply. Itsaid if the banks were judged

not to have met their targets,UK Financial Investments(UKFI) – the body chargedwith managing Governmentbanking stakes – would “workwith the remuneration com-mittees of the relevant banksto determine the appropriateconsequences”.

■ Speech thatsets the tone forthe electioncampaign:Page 3

■ How theBudget willaffect you andyour family:Pages 4-5

■ Small firmswelcome pledges– but doubtsremain on detail:Page 6

■ Visit ourwebsite for allthe latestBudget reactionwww.ldpbusiness.co.uk

Nakedly political Budget – Alistair Darling in traditional pose inDowning Street yesterday Picture: FIONA HANSON

‘Wehaveworkedtoohardtothrowawayrecovery’

byRobMerrickLDPPOLITICALCORRESPONDENTnews@liverpool.com

2010

2 Thursday, March 25, 2010

Election Budget givesLDPbudget

Package for businessesBUSINESS leaders wel-comed a series of Budgetmeasures aimed at boostingsmaller firms, including acut in rates and more Gov-ernment contracts, butvoiced dismay that an in-crease in National Insur-ance Contributions (NICs)will not be reversed.

The Chancellor an-nounced that an extra 15%of central government con-tracts will go to smallerfirms, which could meanup to £15bn of new businessacross the whole of the pub-lic sector.

He added that businessrates will be cut for oneyear from October, meaning

a tax reduction for over500,000 small businesses inEngland, and said therewill be no increase in theminimum rate of capitalgains tax.

Lower taxes, extra workand more time to pay billswould help thousands ofsmall businesses, whichwill provide the “back-bone” of the UK’s futureeconomic growth and jobcreation, Mr Darling said.

The Federation of SmallBusinesses welcomed thehelp for small businesses,but said it was disappoin-ted that the Chancellor waspressing ahead with theproposed hike in NICs.

2010

No cheer for drinkersTHE Chancellor announcedduty on beer, wine and spir-its will increase as plannedfrom midnight on Sunday.

Alcohol duties will alsoincrease by 2% above in-flation for two furtheryears from 2013.

Tax on cider will in-crease by 10% above infla-tion from midnight onSunday – a move slammedby West Country band TheWurzels, famed for theirhit, I Am A Cider Drinker.

The Government alsoraised duty by 1% above in-flation and said it would in-crease it by 2% in realterms each year until 2014.

The alcohol price rises

were criticised by cam-paign groups. British Beerand Pub Association chiefexecutive Brigid Simmondssaid: “Since 2008, beer taxhas increased by aneye-watering 26% – a £761mtax rise – and we have seenthe loss of 4,000 pubs andover 40,000 jobs up anddown the country.”

Campaign for Real Alechief executive Mike Ben-ner said: “The Budget is acharter for the large super-markets who irresponsiblypromote alcohol as a lossleader at the expense of ournation’s community pubs,real ale and responsiblepub goers.”

Good news for drivers?ALISTAIR DARLING tookpity on motorists by intro-ducing his 3p a litre fuelrise, planned for April 1, inthree stages.

With prices at the pumpsalready approaching re-cord levels, Mr Darlingsaid he wanted to “ease thepressure on family in-comes”. He decided the risewould be 1p in April, witha further 1p rise in Octoberand the final 1p increasecoming in January, 2011.

AA president EdmundKing said: “Drivers’ reliefat the Chancellor not rais-ing fuel duty by the full 3pcan be measured by thetankful.

“Had the full increasegone ahead, it would haveadded £1.50 to the typicalcost of refilling a petrol ordiesel car, or £37.50 a year.For a family with two pet-rol cars, that alone wouldhave been four times theaverage increase in counciltax for this coming year.”

Many roads are deeplypotholed following thesevere winter weather. MrDarling said he was provid-ing £100m for local author-ities to repair roads and£285m for improvements tomotorways, includingschemes to allow motoriststo drive on the hardshoulder at peak times.

More cash for parentsPARENTS of children agedbetween one and two willget an extra £200 a year perchild as part of fam-ily-friendly Budget meas-ures announced yesterday.

Work and Pensions Sec-retary Yvette Cooper saidthe “Toddler Tax Credit”would go to 885,000 familiesearning less than £50,000 ayear.

And she also unveiled abenefit boost, worth up to£56 a week, for grandpar-ents and other family “un-sung heroes” who look afterchildren “at times of familydifficulty”. Payments madeby local councils for “kin-ship care” will no longer be

counted against theirclaims for housing andcouncil tax benefit.

Both changes will be paidfor by £200m savings the De-partment for Work and Pen-sions aims to realisethrough automating benefitprocessing and reducing ac-cidental overpayments.

“This toddler tax creditgives parents more help andchoice when they need itmost,” Ms Cooper said, de-tailing the change.

“It will give families withyoung children an extra£200 a year in their pocketsat a time when many par-ents want to stay at home orwork part-time.”

Inheritance ‘stealth tax’INCREASING numbers offamilies will be caught inthe inheritance tax net afterthe Government announcedplans to freeze thethreshold at which the taxkicks in.

Chancellor AlistairDarling said the thresholdwould be held at £325,000 forthe coming four years in or-der to fund the cost of carefor the elderly. The moverepresents a back-track onprevious announcementsthat the threshold would beraised to £350,000.

Frank Nash, senior taxpartner at accountantsBlick Rothenberg, said:“The freezing of the inher-

itance tax nil rate band at£325,000 for the life of prob-ably the next Parliamentwill gradually bring morehomeowners into the graspof inheritance tax.

“What this amounts to isa stealth tax on middle Eng-land who are being asked tosubsidise long-term healthcare for the nation.”

Inheritance tax ischarged at 40% on all assetsworth more than £325,000that are left behind whensomeone dies.

KPMG partner DavidKilshaw said: “By freezingthe nil rate band, the Chan-cellor has put the teeth backinto inheritance tax.”

Campaign speech or financial statement? – Alistair Darling, centre, with Prime Minister Gordon Brown andLeader of the House of Commons Harriet Harman

3Thursday, March 25, 2010

Labour cause to cheer

Alistair Darling holds up his ministerial red box outside 11 Downing Street, before heading to the Commons Picture: SANG TAN

IT WAS less the last Budget speech of theParliament – and more the first speech ofthe general election campaign, now justtwo weeks away.

And, what’s more, Labour MPs left theCommons chamber believing it mightjust be the hour-long oration to pull off ashock polling day comeback.

Before he got to his feet, AlistairDarling’s task was to somehow convincethe City he has a plan to restore thenation’s battered finances, while also giv-ing voters something worth walking tothe ballot box for.

The omens were terrible. The Chan-cellor gave his own speech the advancedbilling of “workmanlike” – scarcely aword to fire enthusiasm – while all hisprevious Budgets have sent Labour dip-ping in the polls.

But Labour MPs found themselves withplenty to cheer – the stamp duty hike formillionaires delivering a classic dividingline with a Tory party pledged to axetheir inheritance tax.

Mr Darling’s tax-evasion deal with Bel-ize may prove to be something or nothing,but, as a device to rouse the Labourtroops – in fury over the “non-dom” LordAshcroft – it was a belter.

Of course, the Chancellor has stillfailed to properly explain how he willhalve the budget deficit in just four years,the most painful spending squeeze in his-tory.

That’s why it will be branded a“phoney Budget” (as it was by Lord Lam-ont yesterday) – and why it was more acampaign speech than a financial state-ment.

But that is less a problem for Labourthan for the Conservatives, who havepledged to cut further and faster, but re-vealed even less of that detail.

The other key election battle is equallyclear. Mr Darling called government a“force for good”, while the Conservativeswant to roll back the state. There is theclear choice for voters.

AlistairDarling leftclearbluewaterbetweenhispartyandtheTories,saysRobMerrick

Green investmentA NEW green investmentbank was unveiled yester-day in a bid to stimulatebillions of pounds ofprivate finance for low-car-bon industries such as off-shore wind farms.

Chancellor AlistairDarling said the new bankwould control £2bn in as-sets and “unlock billionsmore” from the private sec-tor for green energy andtransport development.

Investment will focus inparticular towards offshorewind energy “where Brit-ain is already the worldleader” he said, with £60mgoing to develop portswhich will be the site of

turbine manufacturing.Half the £2bn would beraised from the sale of as-sets including the ChannelTunnel rail link, while theother half will come fromprivate investment.

The Chancellor was re-sponding to calls from theenergy industry and envir-onmental campaigners toprovide Government sup-port for private investmentin low-carbon industries.

They hope these meas-ures will encourage com-panies to put their moneyinto energy efficiency tech-nology and electricvehicles, creating jobs andcutting emissions.

Bank accounts for allEVERYONE will be guaran-teed access to a basic bankaccount under plans an-nounced in yesterday’sBudget.

Chancellor AlistairDarling said the movewould lead to up to 1m morepeople having access tobank accounts during thecoming five years.

There are currentlyaround 1.75m adults who donot have a transactionalbank account, more thanhalf of whom are among thepoorest fifth of the popula-tion, according to a Treas-ury task force.

But the banking industrysaid it already offered

everyone access to a basicbank account. Basic acc-ounts enable people to re-ceive credits, such as wagesor benefits, while they canbe used to set up direct deb-its and some accounts alsocome with a debit card.

But they do not offer acheque book or overdraftfacility, although some ac-counts have a £10 bufferzone.

All of the major banks of-fer the accounts, which canbe opened by anyone whocan prove their identity.

The number of unbankedhouseholds fell from 3.57min 2003/04 to 1.75m in2007/08.

ISA plans for savers

SAVERS received somerare good news yesterdaywhen the Chancellor an-nounced plans to increasethe annual ISA allowancein line with inflation eachyear.

The Government hasalready announced plans toraise the amount peoplecan save tax-free each yearfrom £7,200 to £10,200, ofwhich £5,100 can be held incash. The new thresholdcomes into force from thebeginning of the new taxyear on April 6 for allsavers, with those agedover 50 already benefiting.

Alistair Darling said theannual allowance would

continue to rise in linewith inflation each year.

Around 19m people cur-rently have an ISA, withsavings in the accountstotalling £270bn.

Commentators predictedthe move would mean ISAallowances would increaseby around £1,000 to £11,200within five years, based oninflation of around 2%.

Kevin Mountford, head ofbanking at Chester’smoneysupermarket.com,said: “Increasing the ISAlimit and allowing morepeople to save more in cashmeans more flexibility forpeople when choosing ahome for their savings.”

Conservative leader David Cameron responds to the Budget The Wurzels – criticised yesterday’s 10% tax rise on cider

LDPbudget 2010

4 Thursday, March 25, 2010

How theBudgetimpactson you

Pensioners warm to Mr Darling

RETIRED doctors Nualaand Conal Gallagher bothlive on a state pension, plustheir NHS pensions for hav-ing worked as GPs duringtheir careers.

Both in their eighties, thecouple say their first im-pressions were positive. DrNuala Gallagher said themost relevant aspects ofyesterday’s Budget for themwere the increased supportfor pensioners through pen-sion credits and winter fuelpayments.

As the Cressington Parkcouple are over 80, theystand to receive an extra£400 towards fuel bills.

Tony Reddin, accountantwith global accountancyfirm Grant Thornton, saidin his opinion the couplestood to be slightly betteroff as a result of the Chan-cellor’s measures, which,Mr Darling said, would seethem entitled to an incomeof £132 a week.

Mr Reddin said: “As per-sonal allowances and taxrates have been frozen, thiscouple's net income will bebroadly neutral comparedto last year.

“Some good news forthem is the increase in therate of state pension andpension credit entitlement,

which will mean that theywill be better off by about£200 per year.

“The extension of thewinter fuel allowance for afurther year will mean thatthis couple will once againbe able to benefit from the£400 annual payment.

“The freezing of the In-heritance Tax threshold at£325,000 for the next fouryears will be a disappoint-ment, but at least they willbe able to take advantage ofthe transferable nil rateband meaning that the first£650,000 of their combinedestate will be tax free.”

VERDICT: Better off

Newly-employed will be worse offAFTER 12 months unem-ployed, 21-year-old city manJamie Lock has already be-nefited from the Govern-ment’s Future Jobs Fundscheme, aimed at providingwork and apprenticeshipsfor 16 - 24-year-olds.

He is on a six-monthplacement at the North Liv-erpool Regeneration Com-pany, earning the minim-um wage, and hopes to con-tinue in the job.

The Chancellor an-nounced that the FutureJobs Fund scheme will beextended, but as to whetherthis year’s Budget will im-

prove his future economicoutlook is in question.

Grant Thornton account-ant Tony Reddin said: “Thefreezing of the personal al-lowance and tax rates willmean that, in net payterms, Jamie will be in thesame position as last year.

“However, the Chancellorjustified maintaining ratesand allowances at a timewhen inflation was at ornear zero.

“If the cost of living risesas expected over the com-ing months, Jamie will ac-tually begin to feel worseoff.

“The rise in fuel dutieswill increase his annualmotoring costs by about £30a year, but, as the Chan-cellor has deferred the pre-viously announced 3% in-crease over the next 10months, the full impact ofthe rise will not be felt im-mediately.

“If Jamie is in a positionto save, then he should lookto take advantage of the in-crease in ISA allowancesfor all taxpayers, meaninghe can now contribute upto £5,200 per year to a tax-free saving plan.”

VERDICT: Worse off

Stealth tax hits couple

Mixed blessings for small businessesBUSINESSWOMAN andmarried mother-of-twoPaula Birkett runs abarbers’ shop in Tuebrook.

She says the recession hashit her business hard, withcustom down by around40%.

Accountancy expert TonyReddin, of Grant Thornton,said there were mixed bless-ings for the family in thisyear’s Budget.

Mr Reddin said the familywould have around the samenet income following theBudget.

He added: “There is somepositive news for Paula as aresult of the incentives thatthe Government are intro-ducing aimed at helpingsmall and medium sizedbusinesses.

“Perhaps most notably,the Government has an-nounced an extension tosmall business rates reliefmeaning that business thatoccupy properties with arateable value of £12,000 orless will have some form ofrates relief.

“A further welcomechange will be the extensionto the time to pay arrange-ments whereby business canspread the burden of tax,National Insurance and VATpayments over a period of

time. While this is to be wel-comed, our recent experi-ence suggests that it is moredifficult to get HM Revenueand Customs to accept apayment plan.

“The Government havealso introduced furthermeasures to help strugglingbusinesses with the exten-

sion of the Annual Invest-ment Allowance from£50,000 to £100,000. Whilethis is not likely to helpPaula's business directly, itis hoped that this will en-courage business invest-ment generally and helpstimulate the economy.”

VERDICT: Better off

DAVID and Lynsey Lewis livein a town house in RodneyStreet, Birkenhead, which theyare buying with a mortgage.

David, 32, is a health careassistant, while Lynsey, 29, isan office administrator, andtheir joint family income fallsinto the £20,000-£30,000 bracket.

They have one car, a SuzukiLiana medium sized hatch-back.

Our expert, Tony Reddin,said of David and Lynsey:“They will find very littlechange to their circumstancesfollowing this Budget.

“Their take home pay willremain the same, although asthe cost of living rises they willfind that the stealth tax of in-

flation will make them feelslightly worse off.

“Planned rises to NationalInsurance from next year willalso impact on their income inthe future.

“Increases in the costs ofmotoring and socialising willaffect them adversely by about£80 per year.

“They will, however, bepleased with the extension ofthe 0% rate of stamp duty onproperty purchases up to£250,000, meaning that theirnext step on the housing lad-der will be more affordable.Whether this measure stimu-lates the housing market gen-erally remains to be seen.“ ”

VERDICT: Slightly worse off

LDPbudget 2010

Jamie Lock

Lynsey and David Lewis, of Birkenhead

Pensioners Nuala and Conal Gallagher, from Cressington ParkPicture: JAMES MALONEY/ jm240310budget-3

Hairdresser Paula Birkett – business hit hardPicture: GARETH JONES/ grj220310budget-1

5Thursday, March 25, 2010

Child credits benefit single mother

LAYLA HEDDERICK is 25 and mother ofthree-year-old Ella. She lives with Ella inrented accommodation in Hoylake Road,Birkenhead, and is studying catering andhospitality at Wirral Metropolitan Col-lege.

She relies on income support and childbenefit and doesn't have a car. "I'd loveto have one, but I can't afford it so I walkeverywhere," she says.

Tony Reddin said: “Layla will benefit

from the increase in child benefits by £15per year, and will also benefit from theincrease in child tax credits by about£120 per year.

“Overall, Layla will feel slightly betteroff following the Budget.

“As Layla does not use a car and drinksonly occasionally, the rise in the cost offuel and alcohol duties will not affect hersignificantly.”

VERDICT: Slightly better off

BusinessangeratincreaseintheUKminimumwageBUSINESS leaders criti-cised the Governmentafter it emerged that theminimum wage is to in-crease by 2.2% to £5.93an hour.

Chancellor AlistairDarling made no mentionof the rise in hishour-long speech to theCommons but, in a228-page Treasury docu-ment published after-wards, it was revealedthat the adult minimumwage will rise from thecurrent £5.80 an hour inOctober.

“This increase strikes abalance between helpinglow-paid workers andfamilies, and ensuringthat the rise does notdamage their employ-ment chances,” said thedocument.

“When increased in Oc-tober, 2010, the NMW willhave risen by over 22% inreal terms since the Gov-ernment introduced it in1999.”

The British Retail Con-sortium complained that,in a year of continuedeconomic uncertainty,the increase was “irre-sponsible”.

The BRC said it was“excessive”, and at oddswith Government prom-ises of prudence and withwhat was happening topay generally, with manyemployers forced tofreeze wages to safeguardjobs.

Director-general Steph-en Robertson said: “Ameasure of this mag-nitude should have beenin the Budget speech.This increase is down-right irresponsible. It’s atodds with Governmentpromises of prudence andpublic sector freezes, andwill damage retailers’ability to maintain andcreate jobs.

“How can an increasevirtually double lastyear’s be justified? Eco-nomic conditions werefar weaker in the run-upto this year’s decisionthan 12 months earlier.

“The BRC supports theprinciple of the minimumwage, but it’s sheer mad-ness to be forcing newcosts on this scale on toretailers and their suppli-ers.”

TUC general secretaryBrendan Barber said:“Once again the Low PayCommission has man-aged to resist employercalls for a freeze, and hasbeen able to agree a mod-est increase to the min-imum wage rate despitethe difficult economictimes. This rise will be-nefit around a millionpeople and will mean anextra £5.20 in the wagepacket of a 40-hour perweek worker on the min-imum wage. This is a re-latively modest increasewhich the evidence showsemployers can afford.”

LDPbudget 2010

Jamie Lock

ynsey and David Lewis, of Birkenhead

Single mother Layla Hedderick, 25, with her daughter, EllaPicture: JASON ROBERTS/ jr240310budget-1

6 Thursday, March 25, 2010

Small firmssatisfied–butwaryofelectioneerChancellor

More reaction from the business sector to Alistair Darling’s 2010 Budget

The LDP Business Budget panel 2010. From left: Carl Cross (Rensburg Sheppards), Paul Kelly(Parker Kelly Financial Services) and Jack Stopforth (Liverpool Chamber of Commerce)

THE Chancellor’s 2010 Budget proveda big hit with small business – butdoubts remain over the fine detail.

Liverpool Chamber of Commercechief executive Jack Stopforth admit-ted he was surprised and “quitepleased” to see how much AlistairDarling devoted to the sector.

“About a quarter of the time hewas on his feet he was talking aboutsmall business, and for anotherquarter he was talking about train-ing.

“I was very pleased to see someinitiatives, like the suspension ofbusiness rates for 12 months.

“That caught me from left fieldsomewhat.”

He admitted disappointment thatplans for a 1% National Insuranceincrease still remain, but added: “Wehave a bit of time to work on that. Itis such a crude tax on jobs.

“I was also disappointed that therewas not more recognition of the costto business of employment legisla-tion.”

He welcomed the headline meas-ure of reducing the borrowing re-quirement by half in four years, butsaid: “Business will want to knowhow he is going to achieve that.

“Overall, I thought it was a veryadept performance.

“Just a few weeks from a GeneralElection, I didn’t expect a lot of de-tail, and he didn’t disappoint us.”

Mr Stopforth was part of the LDP

Business Budget panel 2010 that de-livered its reaction on a live streamfrom the business district’s CrossKeys pub.

Fellow panellist Carl Cross, fromLiverpool stockbroker RensburgSheppards, said: “I thought it was apretty good performance by AlistairDarling, but very short on any kindof information about how he's goingto tackle the deficit – some talk about£11bn in efficiency savings, but allGovernments have a tendency to saythat.

“It was inherently very politicalwith the election just six weeks away,but very short on precise detailabout how that enormous deficit isgoing to be addressed – and that'sreally the big concern.”

Panellist Paul Kelly, from the Liv-erpool office of Parker Kelly Finan-cial Services, admitted his surprisethat the Chancellor did not decide tocontinue the scrappage schemewhich saw drivers rewarded for buy-ing new green cars and has beencredited with boosting the Britishautomotive industry during the re-cession.

“I was sceptical when it was in-troduced last year that it would be asuccess. I was proved wrong.

“I wonder why it’s not been con-tinued. It would help the jobs situ-ation and also help the environmentby taking old and polluting cars offthe road.”

Peter Stoney, senior fellow in eco-nomics at the University of Liver-pool, praised the Chancellor’s en-couragement of small businesses.

“The university innovation link-upis quite a good point and the busi-ness rate could well be welcomed bySMEs (Small to Medium-sized Enter-prises), although how the suspensionof rates is going to impact on thebigger picture is unclear.

“The increase in investment allow-ances is a good thing, as is the in-vestment bank for green energy, sothere’s been some specific measuresbut there will be a moan from SMEsabout the 1% National Insurance in-crease, although that’s not coming infor another year and by then thingswill be better anyway.”

Mr Stoney said the “nudge” tobanks to increase business loans toSMEs is another supportive measure.

“The overall drift for SMEs was hehas gone out of his way to encourageprivate sector growth,” he added.

“But there’s a worry whether hisforecasts are correct, which could

impact on SMEs and we won’t knowmore about that until after the Gen-eral Election.

“He is going to switch out of ex-isting commitments instead of spend-ing more money, but it is not clearhow he is going to do it.

“It depends on where public ex-penditure is going to be switched outof. If it is from education, that is notgood.”

Mr Stoney said the focus on SMEsis sensible as they make up 95% ofUK business and will account formost of the business growth, but ad-ded: “Whether he has done enough isanother matter.”

Phil Orford, chief executive ofsmall firms lobby group the Forumof Private Business, worried that theChancellor had his eye more on theGeneral Election.

“While it’s clear the Governmenthas been listening to our messages

about small businesses in the recov-ery, there’s a sense that the Govern-ment is courting the small businessvote.”

Michael Sale, president of the Liv-erpool Society of Chartered Account-ants, said: “While the focus on jobsand investment is important in theshort term, businesses will want toknow more about what they can ex-pect in the medium to long term.”

And David Antonia, partner at acc-ountants Mitchell Charlesworth,said: “The bright spots for smallbusinesses, which are the growth en-gines of the economy, are leaving thecore capital gains tax rate at 18%;doubling the 10% capital gains taxrate for entrepreneurs to qualifyinggains of £2m; and cutting businessrates for one year.

“However, the true cost of climbingout of this recession will only be feltafter the election.”

STEPHEN HUNTER, head oftax at KPMG in Liverpool:“There was no radical think-ing regarding the taxationof the corporate sector,which is disappointing giventhat the Chancellor recog-nised that a key element inrepaying the country’s debtwill be the growth of theeconomy, and business is,after all, the engine of thatgrowth.

“We should be thankfulthat there were no bomb-shells, however, and therewas a small helping of goodnews for the region's busi-nesses."

DAVID COWNIE, senior dir-ector in the professionalteam at property agents CBRichard Ellis North West, onbusiness rates: “The keyword is ‘temporary’, sincethe relief will only last for a

single year. I would havepreferred to have seen themoney being used to fund apermanent removal ofdownward transitional re-lief, which would have re-moved the inequitablecharges borne by businessin locations where rateablevalues have been falling.”

MARTIN HOWARD, partnerat property specialist KnightFrank’s rating team: “The

property industry welcomesconfirmation that the emptyproperty rate exemptionthreshold will be raisedfrom £15,000 to £18,000 forthe next financial year.

“However, it is disap-pointing the Chancellor de-cided not to enact the 50%relief for all vacant proper-ties which was possible un-der the current Empty Prop-erty Act.

“Some businesses willcontinue to demolish exist-ing unoccupied premises toescape the widely con-demned financial burden ofthis tax.”

MARTIN WRIGHT, chief ex-ecutive of the North WestAerospace Alliance, said:“The Budget includes meas-ures to ensure banks sup-port small businesses.

“This is welcome but

overdue, since small com-panies have had to bear sig-nificant hardship.

“The emphasis on science,technology and maths inuniversities is also a goodsign of the intent to focusmore on technology in theeconomy.

“On the whole, it was abits-and-pieces Budget thatis not going to give much toan export-led recovery.”

byNeilHodgsonLDPSTAFFneil.hodgson@liverpool.com

LDPbudget 2010

7Thursday, March 25, 2010

FSB attacks Chancellor for not scrapping NI hikeTHE Federation of Small Businesses(FSB) welcomed help for small busi-nesses, but is disappointed that theChancellor is proceeding with theproposed hike in National InsuranceContributions (NICs).

John Allan, Merseyside, WestCheshire & Wigan regional chairmanof the FSB, said: “This Budget hasprovided welcome news on helpingto improve small businesses’ cash-flow, but the increase in the NICswill be bad for job creation.

“Small firms are key to furtheringeconomic recovery as the UK’slargest employer, and we are con-cerned that through continuingplans to increase employee NICs andnot introducing a NICs holiday tofirms employing less than 50 staffwho take on more employees, it willincrease pressure on struggling firmsmeaning they will not be able totake on additional staff.

“FSB and CEBR research showsthat the 1% increase would cost57,000 jobs in the UK. It is a tax onjobs which will do nothing to aideconomic growth.

“Proposals to increase the SmallBusiness Rate Relief threshold willbe welcome news for those smallfirms in England whose cash-flow ishindered by big tax bills.

“A third of FSB members havesaid that business rates are thebiggest taxation obstacle to growthand the announcement will go far tohelp firms.

“The FSB welcomes the Govern-ment’s commitment to get thebanks lending to small businesses,but feels the targets will have littleimpact if the banks do not begin tooffer more affordable finance. TheGovernment must now put pressureon the banks to lend affordable fin-ance to small businesses.”

BillGleeson

FavourablewindhelpsDarling’stightropewalkHAVE you ever watched atightrope walker?

One wobble either wayand he comes tumblingdown.

I got the same impres-sion listening to Chancel-lor of the ExchequerAlistair Darling yester-day. His Budget speechneeded to tread the fineline between the need, onthe one hand, not tocause Britain’s interna-tional credit rating to gointo a tailspin while, atthe same time, not doinganything to antagonisehis party’s core votersahead of the forthcominggeneral election. Thosecore Labour voters in-clude millions of publicsector workers whosepeace of mind Mr Darlingdidn’t want to disturb;not yet, anyway.

In the end, he suc-ceeded in walking apretty straight line. TheChancellor did nothingthat looked at all daringor likely to cause him tolose more votes than hisparty has already lost.

Mr Darling got lucky.The economic winds havebeen a tiny bit more fav-ourable than anticipated.Unemployment, in partic-ular, is lower than pre-dicted.

As a result, tax re-ceipts have held up well,despite the recession,meaning this year’s pub-lic deficit will be £11bnless than forecast. Hadtax revenues been weakerthan anticipated, hewould have had some ex-plaining to do.

The most dramaticthing he did was cutstamp duty for first-timebuyers of homes worthup to £250,000.

Whether this measureis sufficient to stimulatethe housing market isopen to doubt. First-timebuyers will save up to£2,500, but these peoplewill still struggle to per-suade banks and buildingsocieties to lend them themortgages they need, un-less they have saved uptens of thousands ofpounds for a deposit.

An unintended con-sequence of the stampduty cut may be to forcesellers of houses cur-

rently valued just abovethe £250,000 threshold toreduce their asking price.

Mr Darling took theopportunity to sound dog-matic about taxing thewell-off. The increase instamp duty on the pur-chase of homes worthmore than £1m is un-likely to lose him anyvotes, but it is very likelyto create the impressionthat Labour is rediscov-ering its basic instinct tohurt the nation’s wealthcreators.

There were plenty ofcheery sounding meas-ures introduced for busi-ness. The nationalisedbanks have agreed tolend billions of pounds tosmall companies. A new£500m investment fund isbeing created to helpsmall firms grow.

It all sounds great, butas ever, with anythingany Chancellor saysthese days, it wouldn’t bea great surprise should itturn out that very little ofthat money actuallymade its way to busi-nesses.

This Chancellor de-ferred the tough de-cisions. The public sectorgets to keep its currentemployment levels for thetime being. The quid proquo for that is public sec-tor pay rises will be keptunder tight control overthe next few years. Thatseems to be a good dealfor public sector workers,who will understand onwhich side their breadhas been buttered.

Many in Liverpool maysee an even stronger rea-son to see that Labour isbest for them. The prom-ise that many thousandsof Civil Service jobs willbe relocated from Londonto the regions is verylikely to benefit this city.Pall Mall and environscould be transformed in-to a Whitehall in theNorth. Liverpool has theinfrastructure to handlea big influx of jobs.

The downside is thatLiverpool’s economy isalready over-dependenton the public sector as itis. It’s a factor that actsas dampener on the paceof economic growth inthe region.

Support for video games industry is ‘inspired’VIDEO games trade association TIGAhas warmly welcomed the Budget an-nouncement that the Governmentplanned to introduce tax relief for thesector.

Video gaming is a major industryin Merseyside and Cheshire, withleading firms from Sony ComputerWorldwide Studios Europe to BizarreCreations employing hundreds.

TIGA has been calling for the Gov-ernment to give developers taxbreaks to ensure talent remains inthis country, rather than going tocountries such as Canada where suchsupport is offered.

TIGA chief executive Dr RichardWilson said: “This is an inspired de-cision. In backing TIGA’s Games TaxRelief, the Government has chosenthe future over the past, growth overdecline, success over failure.

“Games Tax Relief will increaseemployment, investment and innov-

ation in the UK video games sector.Our research shows that Games TaxRelief over a five-year period shouldcreate or protect 3,550 graduate leveljobs, increase or safeguard £457m indevelopment expenditure and encour-age developers to adopt new businessmodels and create new IntellectualProperty.

“Games Tax Relief will ensure thatthe UK remains a world leading de-veloper of video games. Games TaxRelief is good for the UK video gamesindustry, good for UK consumers andgood for the UK economy.

“For this to be announced in theBudget is the decisive breakthroughthat TIGA has campaigned for. Min-isters have made the right decision atthe right time for the right industry.

“TIGA now looks to the Oppositionparties to give their full support toGames Tax Relief in the FinanceBill.”

‘A mutton dressed as lamb Budget’, says PSPTHE Formby-based leader of PrivateSector Partners (PSP), Len Collinson,accused the Chancellor of election-eering.

PSP represents 25 professional in-stitutions and trade associations inthe North West.

Mr Collinson said: “This was amutton dressed as lamb budget de-signed for the election.

“There were some superficially at-tractive measures such as the busi-ness rates suspension, the doublingof entrepreneurs’ CGT relief, and theextra money for science places at uni-versity.

“However, these are extremelymodest and must not flatter to de-ceive. Britain is standing on an eco-nomic knife edge with public debt atits highest-ever level.

“In this context, the Budget was aprofound failure. It did not tackle

public sector overspending or sub-stantially reduce public borrowing.

“So we remain in perilous waters.If world interest rates go up, we maynot be able to pay the interest on our

debt. It is that serious, so businesswill remain extremely concernedabout the future of the economy.

“Big, bold and unpopular decisionswill need to be made.”

Small firms the key – John Allan,of the FSB

Government has made rightdecision – Dr Richard Wilson

Budget ‘a profound failure’ – Len Collinson, leader of PSP

LDPbudget 2010

8 Thursday, March 25, 2010

byTonyMcDonoughDEPUTYBUSINESSEDITORtony.mcdonough@liverpool.com

StampdutychangeahugehelpforhousingmarketESTATE agents in Merseyside lastnight welcomed the news that stampduty will be scrapped for first-timebuyers purchasing properties costingup to £250,000.

The move, which will apply duringthis year and next year, will meannine out of 10 people buying their firsthome will not be liable for the tax.

The change will offer some relief tohard-pressed first-time buyers, whocurrently have to save up deposits av-eraging 25% of their home’s value.

It will be funded through the in-troduction of a new stamp duty bandof 5% on properties costing more than£1m from April next year.

Around 92% of first-time buyerswould have been exempt from stampduty during 2009 if the threshold hadbeen £250,000, according to the Coun-cil of Mortgage Lenders.

People buying their first home inLondon and the South East will be thebiggest winners as a result of the in-crease, with 74% of first-time buyersin the capital and 72% in the SouthEast buying homes priced between£125,000 and £250,000 during 2009, fol-lowed by 61% of people in the SouthWest.

But, at the other end of the scale,only 15% of buyers in the North arelikely to benefit from the move, risingto 20% in both Wales and Yorkshireand Humberside.

James Kersh, a director of one ofMerseyside’s biggest estate agencies,Sutton Kersh, said the measures couldstimulate recovery in the local hous-ing market.

He added: “A vast improvement inthe availability of mortgages remainskey to the recovery of the housingmarket. The Budget announcement ofstamp duty being doubled to £250,000should help to stimulate the first-timebuyer and lower end of the market.

“Increased activity in these marketsshould then filter in to the broadermarket. Properties valued at £250,000or less account for a large proportionof the local market.

“If Lloyds Bank and Royal Bank ofScotland increase their lending as re-quested by the Government, then this– teamed with the new stamp dutyrules – should aid further recovery inthe housing market.”

Daniel Stear, of Kirwans Solicitors,also welcomed the announcementfrom the Chancellor.

He said: “The announcement by theChancellor that stamp duty will beremoved on properties up to £250,000for first-time buyers is extremely wel-come news, which will hopefully gosome way to kick-start the propertymarket.

“Although there is activity in thehousing market, first-time buyers arethe key and at present they are facingan uphill struggle to raise enoughmoney for deposits. What the marketneeds right now is a boost in con-fidence and the changes should go along way to providing that.

“Scrapping stamp duty up to

£250,000 will provide a much neededrelief for cash-strapped first-time buy-ers, and the measure will help to in-ject life back into a still fragile hous-ing market.”

Louis Anastasiou, managing direct-or of estate agents Andrew Louis, de-scribed the doubling of the allowance

as “fantastic”, but said more could bedone to help the market.

He added: “The Government needsto do more to make finance moreavailable to first and second-time buy-ers.

“Enquiries are coming through andhave trebled on last year, credit rat-

ings are strong but wannabe buyersare finding it hard to get finance.”

However, not everyone in the Mer-seyside property sector was so easilyimpressed.

Chris Johnson, managing partnerof Wirral-based agency Smith andSons, said the stamp duty change wasa “headline grabber” but was scep-tical whether or not it would producereal benefits for the market.

He added: “While the threshold forstamp duty has doubled from £125,000to £250,000, for the following two yearsand as this Government remains inpower, this is only applicable forfirst-time buyers, therefore anyonewho has previously owned a propertywill not be eligible for this relief.

“In addition, as bank finance re-mains difficult to obtain, I believe thatthis proposal, while welcome, may nothave any particularly wide-ranging ef-fects.”

And Alan Binks, of Homelets, alsosaid: “Undoubtedly, this is a goodmove, but realistically what first-timebuyer can afford a £25,000 deposit on a£250,000 house?

“And that’s the absolute minimum.Having said that, the stall in the buy-ers’ market has had a great impact onthe rental market and this should helpthat further, as many tenants are frus-trated buyers saving up for their de-posit. I can’t see that changing thisyear.

“Hopefully they’ll make it easier forpeople to sell their homes so we canget more stock and satisfy demand.”

Chris Johnson, of Smith and Sons – points out that bank finance is still very difficult to obtainPicture: JAMES MALONEY

Darlingshelp tokeep uptraditionALISTAIR DARLING’Sappearance on thesteps of 11 DowningStreet to pose for pho-tographs with his wife,Margaret, before deliv-ering his Budget, con-tinues a long-held trad-ition.

The image of the pairprovides a visual mark-er in history of theChancellor’s most sig-nificant task.

With Mrs Darlingresting her head on herhusband’s shoulder, thepictures will join arch-ives tracking the chan-ging faces, hairstylesand fashions of politi-cians and their spouses.

Wearing a beige skirtand jacket with blacktights and a black bag,the current Chancel-lor’s wife’s clothes werein keeping with thesmart attire chosen byher predecessors.

But beyond the form-al nature of the outfits,there have been a num-ber of differences instyle.

In 1929, then-Chan-cellor WinstonChurchill and his wife,Clementine, attracted acrowd of onlookerswith her striking furcoat and hat and his tophat and bow tie.

By the 1970s, the menof the hour no longerdressed so formally,and had adopted thesuit and tie option stillworn today.

But there were signsthe women were retain-ing an air of formality.

Roy Jenkins’s wife,Jennifer, donned blackgloves with a skirt suitbuttoned to the neckfor the 1970 Budget.

In 1978, DenisHealey’s wife, Edna,kept her hair in thesame set, curled stylebut opted for a floralpatterned blouse andjacket with a necklace.

James Kersh, of Sutton Kersh – said the move could help recovery

The Chancellor withhis wife, Margaret

LDPbudget 2010