The Budget provides some cheer for the Westcountry

Stephen Morse, Head of the Business Group at Michelmores, looks at the aspects of the Budget that may benefit the Westcountry.

It's not often that The Chancellor of the Exchequer pulls rabbits from hats nowadays, but George Osborne managed it with the closing announcement of his Budget speech.

Not only did he freeze the fuel escalator, something that was widely anticipated, but he actually cut the price of a litre of fuel by 1p, much to the fury of the oil sector whom he is taxing to pay for it.

Any cut in fuel costs is welcome news in the Westcountry where we are more reliant on independent travel than most other regions and the freezing of HGV vehicle excise duty will also be welcomed by hauliers and distribution businesses, a sector vital to the regional economy.

Other good news includes a more relaxed planning regime and a presumption in favour of sustainable development; confirmation of the Green Investment Bank, which will give confidence to potential investors in the renewables sector; a shared equity scheme to help first time buyers, which could give impetus to the construction industry; help with water bills; and even some funding for filling in potholes.

In general business terms, the headline measure of cutting Corporation Tax will only benefit some Westcountry businesses where the majority are already paying the lower 20% rate of small business CT. There is also good news in increasing the amounts that individuals and companies can invest in Enterprise Investment Schemes (EIS) from 2012, the significant rise in small companies Research & Development Tax Credits and the extension of the rates relief 'holiday' for small business for the next six months.

Cutting red tape with the removal of £350 million worth of regulation on businesses is helpful but, as readers of our quarterly Business Barometer survey will know, respondents constantly bemoan the amount of red tape that we are all now tied up in, and it remains to be seen whether there will be any real change here.

Again on the positive side, the government's commitment to start-up businesses, apprenticeships and vocational training is welcome.

Charities will also be very pleased with the reforms to Gift Aid and in Inheritance Tax Incentives for those leaving legacies to charitable causes.

On the downside, Devon and Cornwall didn't figure in the allocation of new Enterprise Zones, although the Chancellor did point out the newly formed Local Enterprise Partnerships could bid for one or more this summer.

The lower than targeted growth figures will make it much harder for the Coalition to achieved their fiscal ambitions but there are enough points of value in these measures to warrant mild approval from the Westcountry.

For full details of the Budget 2011 click on the link:
www.hm-treasury.gov.uk/budget.htm