Last week’s budget included a few surprises that will have a big impact on Dartmouth Businesses. In our opinion these are the biggest issues for local firms?
Increases in National Insurance for the self employed
Clearly this will have a big impact in Dartmouth where a higher proportion of people are self-employed than most other regions in the UK. In 2012 it was as high as 27% in South Hams and it now stands at 20% against a national average of 14.2% (figures from http://www.devonomics.info ). So the impact of this increase on our economy will be greater than many other areas. The impact of the help for businesses coming out of rate relief will be minimal because the higher rates set in 2010 took many Dartmouth businesses out of rate relief anyway. Today (13/03/17) we see that Teresa May has delayed the increase by saying the legislation will not be put before parliament until the Autumn and she left the door open for concessions as well. Lets hope they listen to the small business community.
STOP PRESS (15/03/17) Teresa May has announced that this increase will be scrapped. Hooray! At least they are prepared to recognise that they got it wrong and have now corrected their error. Takes courage to admit your mistake.
This is another change that will impact local independent traders and similarly have a bigger impact in Dartmouth than many other areas because we have so many independent traders here. The tax free dividend allowance played a big part in our ability to start our gallery in Dartmouth and helped us to invest in growing the business as it allowed us to retain more of our income than is possible under this change. Now the tax free allowance of £5000, which was only introduced a year ago, is being reduced to £2000. This will make it much tougher for start-up businesses to survive beyond their honeymoon period.
Devolved funding and infrastructure
The West Country seems to have been forgotten in this budget. We need to be asking our MP’s why it is that money is being allocated to Scotland (£350m), Wales (£200m) and Northern Ireland (£120m) whereas the West Country gets nothing. The infrastructure investments of £690m will be focussed on the North (£90m) and the Midlands (£23m) with no mention of the needs of the West Country such as the promised new road and rail links.
Increase in living wage
The increase from £7.20 per hour to £7.50 will be good for employees but for many small independent traders will again hit their margins and make it more difficult to employ local people in their businesses. Perhaps this increase is justified but the impact on our overall economy could end up being negative.
An additional £2 billion will be spent on social care over the next three years. Not enough but it is a start. However with only about 60% and falling of the population in the South Hams of working age the needs here will be greater than most. Let’s hope that we see early results from this higher funding. The impact on businesses in Dartmouth may be seen with an improvement in the survival rate of privately run care homes, which have struggled over the last 5 years.
Overall we in Dartmouth should be especially concerned about the impact of this budget on our town. It is a surprise and a disappointment that the so called party of business has decided to penalise small business in this way. They are the backbone of our economy and deserve to be encouraged not exploited for more tax income. Let’s hope our local MP’s recognise this and fight for our business community in the strongest way possible. Sadly the increase in tax on alcohol will make it more difficult to drown our sorrows!