Welsh business figures have urged the UK Government to restore confidence in the economy ahead of tomorrow's (March 15) Budget statement. Chancellor Jeremy Hunt will make the statement as the UK continues to face issues of inflation, pay and public finances.
David Atkinson, Lloyds Bank regional director for Wales, said that, as Welsh business confidence falls over uncertainty about the wider British economy, firms are looking to the Chancellor for support with long-term growth and stability.
“The budget is an opportunity to encourage investment in technology that will increase productivity while many businesses still battle staff shortages,” he said. “The Chancellor could show that he supports their long-term goals by increasing capital allowances and providing the greater certainty and support businesses need to invest. A growing economy is vital to helping firms in Wales get back on their feet.”
Accountancy body ACCA Wales called on Mr Hunt to improve the standard of service offered by HMRC while also incentivising investment. Lloyd Powell, head of ACCA Cymru/Wales, said: “Our members tell us that businesses in Wales, and the rest of the UK, are fighting against a rapidly changing fiscal context with spiralling energy costs, uncertainty in supply chains, inflation, and rising interest rates, alongside an often-inaccessible funding landscape.
Read more: Decarbonisation plans could 'unlock billions in investment and cut carbon emissions by 40%'
“We are keen to see more detailed improvement plans for HMRC service standards as a matter of urgency. While there are improvement plans in place – for instance about managing debt – we are not confident about progress without additional measures. The Budget is an opportunity for proper investment in HMRC.”
Mr Powell added: “As trusted advisors to business, our members are well-placed to provide early and unique insight into business confidence and the impact of the challenging economic circumstances. ACCA UK hopes the Chancellor will make use of our members’ expertise to help deliver the strong UK economy that works for all.”
It has been reported that the Chancellor could increase the lifetime allowance (LTA) on pensions savings from £1.07m to £1.8m in an aim to stop workers, particularly doctors, from reducing hours or retiring early owing to tax.
Greg Tait, financial planner at wealth manager RBC Brewin Dolphin’s Cardiff office, welcomed the potential increase.
Mr Tait said: “If the new £1.8m cap proves to be true tomorrow, this is fantastic news for many professionals that have had a disincentive to work and save because of the frozen lifetime pension’s allowance of £1.07m.
“We recently called for the LTA and the annual allowance to be inflation-linked following the same triple lock matching that applies to the UK State Pension. This would still be a useful approach for the annual allowance. This would ensure a consistent inflation-linked approach to pensions.”
The Chancellor is also reportedly considering raising the £40,000 cap on tax-free annual pension contributions and that the UK state pension age could rise to 68 sooner than had been expected.
It follows news earlier this week that the UK Government is set to announce a group of 12 Investment Zones for the UK which will each be backed by £80m.
Eight areas in England have already been shortlisted, with the Westminster administration adding that it is “working closely” with the devolved administrations to establish how Investment Zones in Scotland, Wales and Northern Ireland will be delivered, which will account for the four final locations.
With an announcement on the location of Wales’ first freeport expected this spring, Mr Hunt may provide an update on the three bids currently being assessed by the UK and Welsh governments.
However, Mr Hunt is expected to unveil investment for Wales on carbon capture and low carbon, alongside a competition to deliver small modular nuclear reactors - investment which north Wales is well-placed to exploit with its industry expertise.
The Welsh Government will also receive a Barnett Formula consequential from any increased spending in England in areas devolved to Cardiff Bay.
Read more:
