Harrogate welcomes new £30 billion economic package but concern for future remains

Harrogate business leaders have welcomed today's announcement of a £30 billion package of economic measures by the Government as a step towards safeguarding jobs.

Wednesday, 8th July 2020, 4:21 pm
Updated Wednesday, 8th July 2020, 4:28 pm
Sandra Doherty, Chief Executive of Harrogate District Chamber of Commerce, said: The Chancellors statement will be welcomed by many businesses in Harrogate, in particular those in the property and hospitality sectors."

In particular, the moves to cut VAT to just five per cent in the hospitality and accommodation sector and introduce 50 per cent off vouchers for anyone dining out between Mondays and Wednesdays, have been warmly welcomed in Harrogate.

The acting chair of Harrogate Business Improvement District (BID) Sara Ferguson said: “The support outlined for the hospitality sector by The Chancellor is to be broadly welcomed, and one that will hopefully safeguard jobs.

“For those colleagues in the industry who are VAT registered, the temporary cut to five per cent will certainly be seen as an important step, and something we have been calling on for a long time. "However, he could have also extended it to the retail sector, particularly the smaller businesses which have suffered during the coronavirus pandemic.

“The ‘Eat Out to Help Out’ initiative certainly came as a surprise, and I’m sure it will prove popular with customers and businesses alike.

"Bringing people into town to eat and drink will also increase footfall and benefit shops, too.”

Among the other support measures announced by Chancellor Rishi Sunak in the face of a looming recession caused by the coronavirus lockdown were:

A Job Retention Bonus will be introduced to help firms keep furloughed workers, where employers will receive a one-off bonus of £1,000 for each furloughed employee who is still employed as of January 31, 2021.

A new £2bn Kickstart Scheme to create hundreds of thousands of new, fully subsidised jobs for young people across the country.

A total of £1.6 billion to be invested in employment support schemes, training and apprenticeships to help people looking for a job.

Some £8.8bn was committed to new infrastructure, decarbonisation and maintenance projects, in a bid to create more jobs.

A cut to stamp duty until March was also announced.

Sandra Doherty, Chief Executive of Harrogate District Chamber of Commerce, said: “The Chancellor’s statement will be welcomed by many businesses in Harrogate, in particular those in the property and hospitality sectors.

“And with our town having the largest number of start-ups, it is is in a prime position to benefit from the Kick Start Scheme for our young entrepreneurs.

“It’s important that those staff who are currently furloughed are brought back into the workplace as soon as possible, and the measures he announced – a £1,000 bonus per staff member - should help achieve this.

“Whilst the cut in VAT for food, accommodation and attractions, coupled with the ‘Eat Out to Help Out’ scheme are only temporary, I’m sure they will make it more attractive for businesses in the hospitality sector to reopen their doors.

“I hope we can all work together to make the consumer feels welcome and benefit from the saving. Increased feel good factors are often the boost the retailers need to drive footfall.

“The cut in stamp duty will save many buyers £1000’s, which no doubt will be spent on employing tradespeople to do home improvements and perhaps encourage purchasers to take up some of the green homes grant.

“This spending will all fuel our local economy and help improve our local economy.”

While welcoming the new measures overall, the chamber of commerce's national body expressed fears whether it would be enough to prevent the economy falling off a cliff in the autumn.

British Chambers of Commerce's director general Dr Adam Marshall said: "Businesses will celebrate many of the Chancellor’s announcements today, although it is likely that the scale of the stimulus needed to help the UK economy restart, rebuild and renew will need to be greater still over the coming months.

“Targeted measures to help young people gain work experience and enter the labour market at this challenging time are welcome, and, so too is the focus on a greener recovery and the acceleration of key infrastructure projects.

"The VAT cut will help firms in the hospitality and tourism sectors working hard to restart after many months of lost revenue."

The British Chambers of Commerce's co-executive director Hannah Essex said more was still needed from the Government.

She said: “In the coming weeks the Government needs to consider taking further bold steps in response to this crisis.

“BCC's research shows investment intentions have been hit hard during the pandemic, and so the Government should be preparing new incentives for business investment in the UK, including extending the £1 million Annual Investment Allowance for a further two years and broadening its scope to include training, the transition to net zero and spending on making workplaces Covid-secure.

“Businesses face cliff-edges in the autumn as existing support winds down, and so the Government must consider reducing national insurance contributions and extending existing loan schemes.

"Over the coming weeks the Chancellor will also need to address the ticking clock on a number of other key concerns - including the impending end of key business loan schemes, and the unanswered question around what support will be offered to businesses and communities that face local lockdowns."

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