Enjoy some cheaper petrol. Have a pint on me. Keep a bit of extra cash before the taxman comes. This was the message chancellor George Osborne tried to push in his “budget for an aspiration nation”. There were measures aimed to show that the Tories are on the side of the general public.
The 2013 budget is a ‘see what happens budget’. The actual effect it will have on Islington is not yet known as analysts get number crunching. But it is a mixed bag of tricks, with some measures that could hit the borough hard and some that could prove to be successful.
For drinkers in Islington’s vast night time economy the 1p cut on beer duty and scrapping of the so-called ‘beer escalator’ – a two per cent increase above inflation to the beer price – may seem like a dream. But like most booze-induced prospects, it is too good to be true.
While Osborne is cutting beer duty by a penny, beer prices will still rise in line with inflation. Beer prices will increase contrary to the seemingly rosy picture. As the beer levy was cut, taxes on wine and spirits are set to go up to offset any money lost.
Given the number of drinking venues in the borough, there is no surprise that Islington bar owners are outraged at the latest levies. Islington council has already experimented with “saturation zones” and late night levies on bars open past midnight, so this comes as another punch in the face to struggling drinking holes.
Drivers will welcome the scrapping of a scheduled 3p fuel duty rise in September. With a 26 per cent rise in fuel duty from 45.82p per litre in March 2001 to the current 57.95p per litre, it is about time drivers got a break. Driving in London is already costly with congestion charges and heavy traffic, and there is no doubt this measure will be welcomed by residents.
Osborne’s grand declaration that Britain is “open for business” could have some positive effects on the borough. The corporation tax cut to 20 per cent from April 2015 and the cutting of National Insurance bills by £2,000 for every firm could spur growth in Islington.
Earlier in the month, Islington Now reported that the number of businesses opening year on year from 2009 was on the rise, but Islington startups’ first year survival rate was 3.1 per cent below the London average in 2009 and nearly 10 per cent below in 2010.
The latest measures could help improve the survival of businesses in an ever tougher high street environment. With more staff, ventures could expand and this would help the local economy as well as get local people into jobs.
With business rates high and rents soaring in Islington, businesses will no doubt welcome the corporation tax cut.
Tax reliefs for social enterprises will cause excitement in the borough too. The Hub, a co-working space where people can launch social enterprises from will benefit from the new rules.
But investors will still be wary because of the global economic situation. Britain needs to seriously invest in its innovation and enterprises to attract the sort of outside investment they want, and the borough needs to flag itself up as an attractive prospect.
Osborne has presented a mixed bag of tricks and as Islington puts its hand into the hat, let’s hope we don’t get stung by one of them.