Chiswick businesses, politicians and media react to ‘mini-budget’

Image above: The Chancellor – Kwasi Kwarteng

Mixed reaction to Chancellor’s measures along predictable political lines

Chiswick’s businesses, politicians and media personalities have been reacting to the new Chancellor Kwasi Kwateng’s controversial ‘mini-budget’. 

The announcement, referred to as a ‘fiscal event’ by the Government rather than a ‘budget’, included cutting the basic income tax rate by 1p to 19p from April 2023 and scrapping the 45% top rate for high earners. The 1.25% national insurance rise introduced earlier this year will be cancelled in November.

Stamp duty is being cut. Currently there is no stamp duty to pay in England on the first £125,000 of a property’s value. This is being doubled to £250,000, effective immediately. First time buyers will pay no duty on the first £425,000 of a property’s value, increased from £300,000.

The cap on bankers’ bonuses has also been scrapped, as has the planned rise on corporation tax from 19% to 25%.

Since the announcement on Friday (23 September) in the House of Commons, the pound has hit a record low against the dollar, with Sterling falling close to $1.03 early on Monday before settling at $1.07 at time of writing.

Other measures include the cancellation of planned increases in the duty rates for beer, cider, wine and spirits. The chancellor also announced that the differential duty rate for draught beer would now apply to kegs of 20 litres and above.

“Casino economics”

Image: Brentford and Isleworth MP Ruth Cadbury

On the day of the Chancellor’s mini-budget Brentford and Isleworth MP Ruth Cadbury took to Twitter to complain about the past decade of Conservative rule, which she said had seen “low growth, stagnating pay and sweeping cuts to schools, policing and local councils.”

Levelling Up Secretary Simon Clarke welcomed the tax cuts, claiming the focus on redistributing wealth had “bedevilled” the UK over the last decade.

Ruth responded:

“Over the last decade the Conservatives have cut the funding to Hounslow Council by around £150 million, have cut funding for schools locally, cut the £700 million grant to TFL & cut frontline policing. We have seen a decade of austerity, not redistribution.”

She echoed the Shadow Chancellor, Rachel Reeves’ comments, that the Conservatives were pursuing “casino economics” by chancing the mortgages and finances of families, in order to keep the Tory Party happy.

Image above: Leader of the Conservative Group on Hounslow Council Peter Thompson (centre) with Cllr Jack Emsley (right) and Cllr Allan Joseph (left)

Mini-budget “will support our brilliant local businesses” says Hounslow Conservative Group

Peter Thompson, Chiswick Riverside Councillor and Leader of the Conservative Group on Hounslow Council, said:

“In addition to supporting Chiswick families by reducing our tax burden and lowering our energy bills this winter, the Chancellor’s growth plan includes several measures that will support our brilliant local businesses.

“From supporting our local pubs by freezing alcohol duty to simplifying IR35 rules to make it easier to remove unnecessary complexity and cost for off-payroll contractors, this is a plan which backs our local businesses after a tough two years during the pandemic.”

Above: LBC video of James O’Brien’s monologue Monday (26 September)

Measures make “no electoral or political sense”, says James O’Brien

Broadcaster and Chiswick resident James O’Brien spoke of his bewilderment at the mini-budget, claiming the Conservatives were pushing through ideological policies without evidence that they would work. He said:

“You can only understand this if you view it through an ideological lens…

“Why would Kwateng not let us see the Office for Budgetary Responsibility’s forecasts? […] It would be like having a camera at the bottom of the garden where he thinks the fairies are. You can’t have a camera there, because they camera might actually record the fact that there weren’t any fairies and then I wouldn’t be able to tell anybody that there are fairies at the bottom of my garden!

“So don’t let the light in, whatever you do, because they cling to the ideological belief. The kindest thing I can say about that is they do seem to believe it…”

The mini-budget “made no electoral or political sense” he added.

“I know [felllow LBC broadcaster] Nick Abbot is developing the theory that they know they’re going to lose the next election, so they’re just trying to trouser as much cash as they can for their sort of cronies and compadres, and it’s a compelling theory!”

Image above: Fuller’s Brewery, wine tasting in pub-restaurant Betty

Need for VAT reduction for pubs and hospitality “is as strong as ever”

The British Beer and Pub Association warned that the Chancellor’s scrapping of next year’s planned alcohol duty will do little to stem the tide of closures in the absence of targeted support for hospitality businesses. Like others in the hospitality sector, they are calling a reduction in VAT.

Fuller’s is a member of the British Beer and Pub Association. Chiswick is home to plenty of Fuller’s pubs, including the Bell and Crown, One Over the Ait. The Pilot and The George IV. Last week, the CEO of Fuller’s, Simon Emeny, urged the Government to reduce business rates and cut VAT to further stimulate growth.

While Simon had no fresh comment in the wake of the mini-budget, Emma McClarkin, the chief executive of the British Beer and Pub Association and a former Conservative party spokesperson on international trade, said:

“The measures announced today will mean a boost of £500m for our sector, enabling growth following successive crises and allowing us to thrive in the future.

“We look forward to the continued reduction of taxation on the sector at the next budget – the need for a reduced VAT rate for hospitality and business rates reliefs remain as strong as ever.”

Independent businesses are likewise concerned. Steve Novak, owner of pub-restaurant Betty in Barley Mow Passage, told The Chiswick Calendar recently further support was needed as Betty’s finances, like many pubs, are still recovering from the Covid pandemic:

“Essentially most pubs are still paying off debt from lockdown as we are, pubs need some VAT relief.”

Images above: Stephen Foster, Foster Books on Chiswick High Road

Tories gambling with the economy, says owner of Foster Books

Foster Books have been trading in Chiswick since 1970. They sell old and rare books, including classics, modern first editions, as well as bound, illustrated and collectable editions. They also sell old engravings, including local prints.

Foster Books ship worldwide and do a lot of international business, especially with the United States. The owner, Stephen Foster, said the Conservatives were taking a “massive gamble” with the so-called mini-budget and were continuing the Johnsonian era trait of side-stepping scrutiny.

“It just seems like a massive gamble what they’re choosing to do in terms of the amount of money they’re borrowing”. Stephen said, “I’m horrified at the idea that you can produce a ‘mini-budget’ when it’s the most extensive tax cuts in 40 years but not include the Office for Budget Responsibility.

“From a political point of view it seems like they’re doing exactly what the previous incarnation of this Government did, which is just ignoring the niceties and the rules.”

Stephen said Liz Truss’ Government did not seem to have the “cavalier Johnson-element to it” but he still thinks it extraordinary that something as major as Kwateng’s ‘mini-budget’ could be published without being independently costed. He added:

“That’ll be why the Sterling and the markets are all over the place. Because, just saying to people it will all be fine and we know what we’re doing is not gonna buy it…

“From a business point of view, we’re really quiet because of the uncertainty. What it does for a business like ours, when there’s uncertainty in air people pull their horns in, so we are quiet. Pre the budget we were actually quite busy, weirdly.”

Stephen said he staff might benefit slightly from the cut income tax, but said the things businesses want, such as reforming the rating system, are falling on deaf ears. He should benefit from the drop in the pound against the dollar when exporting to the United Stated but added he was concerned because he had stock sitting in his warehouse in Delaware, which he will eventually have to ship back over to the UK at heightened cost as the pound has plummeted.

“I’m seeing if it will settle down a little bit and will pick a moment when I will choose to incur the cost” he said.

Image above: Snappy Snaps – 182 Chiswick High Rd

“The mini-budget gave me most of what I wanted” – Snappy Snaps manager John Fitzgerald

Last week John Fitzgerald, manager of Chiswick’s branch of photo & digital specialists Snappy Snaps, told The Chiswick Calendar he would welcome a reduction in corporation tax rate. He said most of what he hoped for was dealt with in the measures announced by the Chancellor, including:

“The removal of the 1.25% Health and Social Care Levey, we will no longer have to top up pay to help our staff bear the levy. The reduction of the Employers’ NIC rate back to the same level as 2021/22. The reduction of the Corporation tax and dividend tax rates back to the same level as 2021/22.

“The cut in the basic income tax rate from 20% to 19% and the removal of the additional rate for 2023/24 are definitely a plus, but it appears that high earners are going to benefit more thanlow earners!”

John added that further discounts on business rates would have been welcome and feared the impact of the plummeting pound on SnappySnaps in the near future. He said:

“Sterling has been hammered. We are a bit concerned that may impact the foreign import prices of our raw materials in the short and medium terms. Wait and see!”

Read more stories on The Chiswick Calendar

See also: Chiswick firms welcome Government’s energy price cap

See also: Author Cressida Cowell calls for library in every school

See all the latest stories: Chiswick Calendar News & Features

Support The Chiswick Calendar

The Chiswick Calendar CIC is a community resource. Please support us by buying us the equivalent of a monthly cup of coffee (or more, if you insist). Click here to support us.

We publish a weekly newsletter and update the website with local news and information daily. We are editorially independent.

To subscribe to the weekly newsletter, go here.