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The Budget: What does it mean for you?
2:30pm Thursday 21st March 2013 in News
Yesterday George Osborne announced his Budget “for people who work hard and aspire to get on”.
He admitted that turning around Britain’s finances was taking longer than expected but insisted “we are, slowly but surely, fixing our country’s economic problems”.
Opposition parties said it was a sign that his austerity measures were not working.
But political point-scoring aside, what does yesterday’s announcements mean for Sussex? Reporters Ben James and John Keenan found out.
Landlords and punters are celebrating the scrapping of a planned 3p rise in beer duty as well as an additional 1p cut on the price of a pint.
However, some played down the significance of the move, adding it was “too little, too late” for some pubs.
In the Lord Nelson, in Trafalgar Street, Brighton, landlord Graham Boyd said that he wouldn’t be holding his breath.
“One penny off the price of beer? Quick I’ll get someone on the door. Brace yourselves!”
The industry veteran has been behind the bar of the city centre pub for 18 years.
He said: “It is a step in the right direction but I’m not sure how much of an impact it will have.
“We have seen a rise in beer tax for many years now with thousands of pubs going out of business as a result.
“It’s one of a number of factors which have damaged an already struggling industry. In the last few years we have seen the smoking ban and the introduction of stringent legislation.
“£4 for a pint of beer is a ridiculous amount to pay – but we have to charge that.
“Pubs have changed as a result. We used to get workers coming in for a lunchtime pint and a bit of food but that doesn’t happen anymore.”
Wine, meanwhile, is to go up 10p a bottle, leaving local traders and producers fearing that drinkers will head abroad for their tipple.
Karl Elwood, boss at Elwood Wines in Chester Terrace, Brighton, said the increase in wine duty was regrettable but not surprising.
He said: “The cut in beer duty was a headline grabber. It is almost an insult.
“The hike in wine duty will lead to more people in Sussex loading up on their trips abroad. I will just have to absorb the increase and get on with it.”
Mr Boyd added: “My wife and I have been very lucky in our time in the industry and we have really enjoyed it.
“But if I was starting out now, with all the personal, social and legal responsibility – I don’t think I would.
“The negatives outweigh the benefits.”
Half a dozen former SEEBOARD workers meet up once a week to catch up over a pint. They shared their views on the budget and future of the local pub.
Alastair Fourniss, 67, from Shoreham “It makes no difference to us – we are still going to come down and have a pint.
“If it makes it cheaper then that’s a good thing but I’m not sure how much impact it will have.”
Jim Hilton, 68, from Portslade “I don’t think it will make a huge amount of difference but at least the price isn’t going up.
“I think the smoking ban was what hit the industry hard. People used to go to the pub for a beer and a fag after work, but they don’t bother anymore.
“They will have a fag at home with a can of beer.”
Morris Allfrey, 67, Preston Park “It will help local landlords – but they are still up against the big chains who can outprice them.
“It’s a shame because we come to pubs like the Lord Nelson because they have character and you don’t get blasted away by loud music.”
David Docwra, 69, Shoreham “It’s important to preserve places like this.
“Pubs can be more about coming down for a drink.
“It’s difficult for local landlords these days.”
The planned 3p fuel duty rise was once again shelved by the Chancellor. Motorists and business welcomed the news adding that it would “help get Britain moving”.
Alistair Bingle, the managing director of Bishop’s Move, in South Road, Brighton, said it was fantastic for businesses that rely on the roads to function and operate.
He added: “A fuel duty hike would have had a severely negative impact on the haulage industry and a potential loss of jobs right down the ladder – the knock-on effect would have been unthinkable.
“Scrapping the fuel duty hike doesn’t weaken Treasury tax receipts as the previous above-inflation increases in duty and higher VAT have compensated for that.
“For me there is no argument – scrapping the fuel duty had to happen and I’m delighted that it has. At last we, and our peers, have some respite.
“This has now ensured that our industry, and other businesses that function on the roads, can now get on with business as usual and get Britain moving.”
Motoring lobbyist Steve Percy added: “It is nice to see that the Chancellor is taking note of the problems the rise is causing.
“However the price of petrol is still staggeringly high.
“It isn’t just everyday motorists this impacts – it’s almost all businesses.”
George Osborne dealt a blow to Brighton and Hove’s video games sector after announcing that a planned tax relief was on the back burner.
He told MPs that the European Commission has been unable to approve the cultural test required for tax relief under European law.
But makers of high-end television – which is defined as TV which costs £1 million per hour to produce – and animation will receive corporation tax relief starting in April.
Mr Osborne said: “Today we build on our new tax reliefs coming in this year for the creative industries like high-end television and animation with new support for our world-class visual effects sector.”
Jo Twist, the chief executive of UK Interactive Entertainment (UKIE), said she was “disappointed” by the announcement.
She added: “We hope that the delay will be a short one and shall now be doing everything that we can, working with the government and the European Commission to get the state aid approval that we need as soon as possible.”
Osborne also announced that a further £10 million worth of funding will be made available for the increase of skills in the creative industries over the next two years.
Sussex parents will benefit from a new system of tax breaks which were outlined ahead of yesterday’s budget.
From 2015, the existing scheme of child care vouchers will be replaced with a 20% tax break on costs of up to £6,000 a year.
Claire Jones-Hughes, who runs Brightonmums.com, welcomed the news but said the “devil would be in the detail”.
She added: “Anything that supports working parents is a good thing.
“Many parents want to go back to work and don’t want to take a break in their career.
“Childcare is a massive part of our budget so this can only help.”
She added: “What parents are really tired of is an overly bureaucratic system which a lot of people don’t understand so don’t claim what is available to them.
“That’s the danger with a scheme like this. 20% is a nice figure but it’s all about how it will impact each family and also the wider economy.”
Civil servants went on strike across Sussex yesterday over pay, pensions and the “damaging” budget announcement.
Pickets were held across the county including outside Job Centres in Brighton and Hove.
The Public and Commercial Services Union (PCS), which is the largest union representing civil servants with some 250,000 members, balloted for the action earlier this month.
Clive Bryant, a PCS national committee member who lives in Worthing, said: “This is the start of a three-month programme of industrial action.
“We are working harder than ever to provide services that we all rely on, but, instead of rewarding us, the government is cutting our pay, raiding our pensions and trying to rip up our basic terms and conditions.”
Union member Helen Colomb, who works in the Newhaven Job Centre, added that they were striking on Budget day to show their opposition to the “dismantling of the welfare state”.
She added that the budget was “damaging” and “attacking the most in need”.
The union, which represents workers in the likes of the Department for Work and Pensions, the DVLA, Job Centre and tax offices, is one of the most influential.
The group is asking for a 5% increase with no cuts to pensions.
Gerry Hyde, who works at the Lewes Job Centre, said: “One of the myths peddled around is that we are paid more than the public sector.
“That is simply not true. This shouldn’t be a race to the bottom. The majority of PCS union members are on low wages and struggle with the cost of living.”
Francis Maude, the Cabinet Office minister and Horsham MP, described the protest as “futile, counter-productive and irresponsible”.
He said fewer than 95,000 staff members had taken part in the industrial action, which he said had achieved only a “minimal impact” on services.
Business figures across Sussex have given their reaction to the chancellor's budget speech.
Ian Poysden, managing director of IEP Financial in Church Road, Hove, said: “There has been a great deal of pressure mounting on the chancellor to boost growth and address the spiralling national debt and deficit as the last three years of austerity have not had the desired effect.
“The nation was looking for an inspiring and uplifting budget that would trigger a turnaround in fortunes for both the economy and the government.
"His, 'it is taking longer than anyone hoped' opening remark was met with howls of derision and came as no great surprise.
“He made all the usual big picture announcements around inflation targets, growth and government borrowing forecasts, and gave the tabloids some nice headline opportunities with a 1p off beer duty, but what else was there for businesses and the man and woman in the street?
“Well, while I'm sure the scrapping of the planned September rise in fuel duty will be welcomed, the Chancellor didn't make any radical announcements or policy changes.
“One tax cut for jobs and growth came the way of a 1% cut in corporation tax to 20% in 2015.
“Personal allowances have increased from £8,105 to £9,440 for the new 2013/14 Tax Year and up to £10,000 the following year.
"Those aged over 75 are not so lucky with their allowance being frozen at £10,660.
"However, the Basic State Pension will go up to £5,727.80 for a single person and £9,159.80 for couples and by 2016 (a year early) the proposed level pension will be introduced.
“Interest rates still favour the borrower rather than the saver, but a small gesture that I was pleased to see is the ISA limits will be increasing to £11,520 for 2013/14.
“While we all hope that he succeeds in generating the much needed growth in the economy – only forecast to be 0.6% in 2013 rising to 2.8% in 2017 – it is fair to say that the credit crisis left the economy on its knees and, perhaps unavoidably, the subsequent plans and actions adopted by the government are more of a step into the unknown than a tried and tested formula to recovery.”
While beer drinkers celebrated the news that the chancellor is to scrap the duty escalator on beer, wine retailers were coming to terms with a controversial measure to hike duty to £2.
The cut in beer duty will be welcomed by the city's hospitality sector according to Hannah McIntryre, boss at start-up finance company mylivevison.
She said: “Our clients in the hospitality trade will be delighted to see the beer duty escalator scrapped and beer duty to be cut by 1p.
"A cut in VAT would have been very welcome, not just in the hospitality trade but for all service based businesses such as ours.
“As a Sussex-based business we thrilled with the news that there will be a £1,200 contribution from the government towards childcare costs for those wanting to get back to work.
"As an employer of mum's re-entering the workplace, this is going to be fantastic news.
"It also helps massively that the personal income tax allowance will be raised to £1,000 by 2014 - part-time workers and families will really feel the benefit of this.
"The cost of employing people will also be massively helped as we start up by the Employers' National Insurance cut of £2,000.
"We want to grow, and grow quickly, these measures will help significantly.
“While we have to wait until 2015, we are pleased as all other businesses will be that we will now benefit from the lowest Corporation Tax in the world at 20%.
"The fuel duty escalator being frozen will give some assistance as our team are on the road, but unfortunately fuel costs are so high it will be negligible."
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