Will UK State Spending Cuts Affect the Tyre Market?
Today the axe fell on UK state spending, with some of the largest cuts in public service budgets in decades. But how will the small, medium and large scale business of the tyre industry be affected? The validity of concerns that some public service fleets are considering altering tyre fitment policies to incorporate changes at 1.6mm rather than 3mmt tread depths have yet to be confirmed. One might think that – quite apart from the clear safety benefits and the cost implications that road traffic injuries bring to public coffers – that the revenues MOT fees bring in may lead the government to reconsider recent talk of doubling the length between MOTs and therefore halving the test fee income. There has been no confirmation of that yet either, but there is some good news when it comes to the taxes businesses have to pay.
As part of the much-heralded spending cuts and policies to tackle the UK’s £893 billion budget deficit the Chancellor of the Exchequer, George Osborne, announced a number of measures on tax, as well as other plans related to enterprise such as employment, education and skills, export and inward investment. The plans include a requirement for HM Revenue and Customs to find savings of 15 per cent via new technology and other efficiency measures. This could relate to your business because last year the Forum for Private Business’ ‘Cost of Compliance’ Referendum member survey found that tax administration is one of costliest bureaucratic burdens faced by small firms, leaving them with a bill of £1.8 billion per year. Only employment law and health and safety legislation cost more, at £2.4 billion and £2.1 billion respectively.
“Some of today’s announcements on taxation were welcome, but for too long large companies have been able to exploit tax loopholes – such as Channel Islands VAT ‘low value consignment relief’ – and otherwise avoid paying tax at the expense of small firms,” said the Forum’s Head of Campaigns Jane Bennett. “This simply has to stop if SME growth and job creation is to drive sustained economic recovery. The government should clarify that, in addition to tackling tax evasion, clamping down on tax avoidance by large companies as well as financial institutions will be in its sights.”
In June’s ‘emergency’ budget, when the public sector cuts were first revealed, the government announced tax proposals designed to boost business growth. For the first time in years, for example, small firms’ corporation tax was cut. However, this 1 per cent reduction was considerably less than the fall in the higher rate paid by big businesses, which is being cut by 4 per cent by 2014.
In addition to closing loopholes and further corporation tax cuts she suggested extending the recently-announced National Insurance holiday given for the first 10 staff recruited by new start ups beyond a year and giving a similar NI break to established non-employers to help them create jobs.
50 per cent increase in funding for adult apprenticeships
Meanwhile Steve Yardley, chief operating officer for Remit, The Retail Motor Industry’s commercial arm observed: “We hope that the 50 per cent increase in funding for adult apprenticeships will improve skills within the motor industry by funding training and development and thus make an apprentice an affordable option for garages.”
Commenting on the Coalition Spending Review, which took place earlier today (20/10/10), Yardley said: “plans to increase funding for adult apprenticeships, helping an extra 75,000 people by the end of the Spending Review period, are positive and encouraging news for our industry, and we hope to see the uptake of apprenticeships by employers for this age profile of leavers.”
IAM calls for action to protect road safety in face of cuts
The IAM (Institute of Advanced Motorists) said that spending cuts to transport and police budgets could have a disproportionate effect on road safety, and urges all public bodies involved in reducing deaths on our roads to continue to make road safety their top priority.
Neil Greig, the IAM’s Policy and Research Director, said: “It was great to see a downward trend in road deaths in recent DfT figures, and therefore it’s hard to accept anything that might threaten progress achieved so far. Budget cuts may be necessary but their cumulative effect on some of the main partners in road safety, such as the emergency services and local highway authorities, may make it more difficult to sustain past successes. It would be an awful legacy if budget cuts slowed or reversed the trend to less death and injury on the road.” Greig did not give any details of what the ways in which he expected emergency services and local highway authorities to make their cost savings.