The View from the Chair, Tina McKenzie - February 2020

Press Releases 18 Feb 2020

A Tale of Two Budgets.

In the classic novel by Charles Dickens, ‘A Tale of Two Cities’ depicted London and Paris, with diverse social and political backdrops. Last week’s political developments also reflect a tale of two cities, in London and Belfast. At Stormont, relative certainty has been re-established, with Ministers getting their feet under the table, grappling with the many issues which have been left unattended during the absence of devolved government. Meanwhile, a Cabinet reshuffle in London has caused significant upheaval with the Chancellor Sajid Javid resigning, and the Secretary of State for Northern Ireland, Julian Smith, who had earned a reputation for competence and grassroots engagement, being sacked from his post. We congratulate his successor, Brandon Lewis, on his appointment and look forward to engaging with him on behalf of our members. The change in personnel in the Treasury might not be considered ideal as the Government’s planned Budget for 11th March has now been placed in some doubt. FSB will be hoping the new man in post, Rishi Sunak, looks after small businesses by taking further action on the scourge of late payments and increasing the employment allowance to lower the cost of employing staff. This would go some way to help businesses with the cost of planned increases to the National Living Wage.

However, it is not only in London where the budget matters for NI businesses. Just as important is the Budget which will be brought forward by the Finance Minister, Conor Murphy. This will allocate spending priorities for departments as well as setting the regional rate, used to calculate the rates bill for the year ahead. The Minister has committed to bringing forward a Northern Ireland Budget before the Chancellor brings forward his Budget in London. This poses the question, how will the Executive balance the many competing priorities and challenges facing Northern Ireland? The Budget may well provide the first real test of the new approach to governance that the political parties have committed to. Firms in Northern Ireland will be watching with interest to see if steps are taken to reduce the rates burden which many businesses are struggling with. Northern Ireland has the least generous rates relief offer for small businesses, and last year our business birth rate, which measures new start-ups, dropped significantly. In order to create a better environment for business success, the Minister should embed and enhance the Small Business Rate Relief scheme and introduce a start-up relief, which would allow new businesses to get on their feet before being hit with a rates bill. We also want to see capital investment in key infrastructure projects which have not been able to progress in the years without devolved government. The York Street Interchange and A5 upgrades to the road network should be high on the agenda, similarly properly investing in childcare should be seen as essential infrastructure. FSB met with Conor Murphy last week to make these points clear.

While our asks might be misconstrued as ‘please sir, can I have some more’, in reality these are policy prescriptions that can help create a dynamic economy, driving growth and employment, so we can afford the first-class public services which we all aspire to build. Businesses do not want a hand out, they want a hand up, and they are keen to contribute, provided their contribution is fair and equitable. The next few weeks will be the ‘Tale of Two Budgets’ and to quote from Dickens’ famous opening chapter, businesses will be hoping it will be the ‘best of times’ rather than ‘the worst of times’, a ‘spring of hope’, not a ‘winter of despair’.