BALI statement on the Chancellor’s Summer Budget 2015
‘This is headlined as a budget for working people, which means that it will inevitably impact on the country’s wealth creators, i.e. business owners. BALI members large and small will therefore be bracing themselves for an increased cost burden over the next five years.
The OBR predicts the creation of another 1 m jobs over the next five years; the Chancellor is setting his sights on creating another 2m full time jobs. There is no mention, however, of where these jobs will be created or if there will be incentives for employers. The new National Living Wage for employees over 25 to a target £9/hour by 2020 will undoubtedly affect our members. The landscape industry is dogged by client perception – which is also fact – that pay in this sector is low. We continue to fight for recognition by clients that this is an industry of skilled employees who should be paid at a rate commensurate with the work undertaken and that those rates be reflected in tender pricing.
It is regrettable that the Annual Investment Allowance for spend on plant and machinery is to be markedly reduced and fixed at £200,000 per annum from 1st January 2016; it is currently £500,000. BALI members are beginning to see some realistic medium term growth and the increased AIA had undoubtedly helped. The new, greatly reduced, allowance could affect their investment decisions going forward, albeit it is now a permanent figure.
The intention to place an apprenticeship levy on large firms is concerning but there is little information on this at the moment and we will have to see how this impacts on larger BALI member employers. Their loss, however, could be to the benefit of smaller companies who will apparently benefit financially from taking on new apprentices. We also doubt that the replacement of maintenance grants with student loans will do anything to encourage young people from poorer backgrounds to study and enter a low paid industry such as horticulture and landscaping.
The planned reductions in Corporation Tax are positive, as is the reduction in small firms’ National Insurance contributions. The rise to £3,000 in the Annual Employment Allowance is welcomed but removing this allowance from one-person companies with effect from 1st April 2016 will hit a number of BALI members, including some designers, who will be unable to claim.
We continue to be concerned over further public sector cuts and what this will mean for BALI members in an already struggling sector.
On a final positive note, we are pleased to see that fuel duty has been frozen as transport costs remain a huge issue for our industry and the supply chain. That said, insurance premium tax is due to be increased by another 3.5%!