Harrogate business chief: government’s economic credentials ‘in tatters’

The chief executive of Harrogate District Chamber of Commerce has said the government’s economic credentials are in tatters after today’s emergency statement.

David Simister cautiously welcomed last month’s mini-budget for containing measures to stimulate growth.

He said at the time scrapping the rise in national insurance and reversing the increase in corporation tax was “good news for businesses large and small”.

But Mr Simister was less complimentary about today’s statement by Chancellor Jeremy Hunt, which reversed almost all tax cuts besides national insurance.

Mr Simister said:

“This is a massive U-turn, and the government’s economic credentials are in tatters.

“In the Kwarteng mini-budget there were some real positives for business, cutting corporation tax, reducing national insurance, and reforming off-payroll (IR35) rules. Only the NI reduction has stayed.

“If Mrs Truss goes, and I really can’t see her staying the course, I wonder if there will be a third mini budget in as many months?”

The chamber, which was founded in 1896, supports local businesses and lobbies on their behalf.

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Value of North Yorkshire pension fund secure following crisis, says council

North Yorkshire County County has said the value of its £4.9bn pension fund is secure.

It follows this week’s unprecedented move by the Bank of England to step in and calm markets after fears that some pension funds were at risk of collapse.

The bank ended up pledging to buy £65bn of government bonds, which many pension funds invest in, after their value plunged following last week’s government mini-budget.

To pay for retirement pensions, staff from Harrogate Borough Council and 30 other district, city and town councils in the county pay into the North Yorkshire Pension Fund through their salary.  The fund is administered by North Yorkshire County Council.

According to the pension fund’s latest annual report, the fund has £141m in government bonds, also called gilts.

However, the investment is worth just 3.1% of the total portfolio. The majority of the fund has been invested in shares and other financial products.

North Yorkshire Pension Fund treasurer Gary Fielding said:

“We are monitoring the current situation closely. Although the UK financial market and the value of sterling have been under pressure, this has had a very limited impact on the fund. 

“The investments are spread across the globe and in a range of assets classes, providing the fund with a high degree of resilience.”

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Harrogate district business groups cautiously welcome mini-budget

Business groups in the Harroagate district have broadly welcomed today’s financial measures introduced by Chancellor Kwasi Kwarteng.

Mr Kwarteng announced a mini-budget in the House of Commons this morning.

It included cutting income tax, stamp duty and reversing the rise in National Insurance contributions and corporation tax.

Mr Kwarteng also lifted the cap on bankers’ bonuses and heralded the measures as a “new era” for the UK economy.

David Simister, chief executive of Harrogate District Chamber of Commerce, said he welcomed some of the measures.

He said:

“The UK’s economic situation is very fragile, we are technically in recession, inflation is putting pressure on household budgets and an increase in interest rates will put a strain on many homeowners’ budgets.

“The aim of this emergency budget is to stimulate the economy by cutting taxes and giving people more money in their pockets.

“The scrapping of the national insurance rise and reversing the increase in corporation tax is certainly good news for businesses large and small.

“Employees across the board will benefit from the NI reduction, as well as the cut in the basic rate of income tax, but the latter won’t be felt until after next April. Cutting the cap on bankers’ bonuses is a contentious issue for some, but it is designed to attract the brightest and the best in the industry to the UK.”

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Ripon BID welcomes corporation tax move

Lilla Bathurst, manager at Ripon Business Improvement District, said it remained to be seen if the planned tax cuts will work.

She said:

“Ripon BID welcomes the scrapping of the planned increase in corporation tax and the reduction of national insurance contributions  and the relief this will bring to businesses and employees.  It remains to be seen if these tax cuts will generate sufficient growth to off-set the tax the Chancellor has given up.

“Ripon BID is disappointed that the government did not follow the recommendations set out in the BusinessSOS campaign, supported by over 150 Business Improvement Districts including Ripon BID.  We asked for a package of measures including business rates relief and a reduction in headline VAT rates for retail, leisure and hospitality.

“The previous announcement of support for businesses energy bills was welcomed but as stated previously we feel did not go far enough and uncertainty remains.”

Knaresborough chamber warms of business failures

Knaresborough Chamber of Trade and Commerce said it welcomed the cut in corporation tax, but added that this winter will still be difficult for many businesses.

Chamber executive member Peter Lacey said:

“I like to be positive, but can’t say I’m confident that we’ll not see business failures in the coming months.

“We’re committed to supporting the businesses of the town and its surrounding area but recognise that we’ll need to redouble our efforts in the current economic climate.”

Nidderdale chamber: measures ‘give confidence’

Meanwhile, Tim Ledbetter, chair of Nidderdale Chamber of Trade, said:

“We welcome measures announced by the government today, whilst reserving judgement on many of them until the finer detail has been analysed.

“The measures will hopefully give confidence to the public and businesses who understandably have had their confidence rocked by events, not just in this country but from around the world.

“I suppose with the cancellation of the planned rise in duty on beer, wine and spirits people can at least either celebrate or if disappointed with the measures drown their sorrow.”