It comes as proprietors of fast-food restaurants criticized the absence of support for small businesses in today’s mini-budget and called with the government to assist their struggling industry.
This morning in the House of Commons, the Chancellor of the United Kingdom, Kwasi Kwarteng, proposed a variety of new tax-cutting measures.
Among the most notable pronouncements was the decision to fix the company tax rate at 19 percent, while limiting the basic income tax rate to the same low level.
However, Steven Dhillon, whose family runs the award-winning Whitley Bay fish and chip shop Fisherman’s Bay, stated that these steps will not help his firm, which is failing due to the rising costs of fish, oil, and energy.
Mr. Dhillon remarked, “We are forced to raise our pricing.” However, we must also carry a great deal on our own shoulders. We cannot pass on the entire discount because we have a large number of repeat clients and we have already observed that fish and chips are becoming a less common dinner. This is becoming a once-in-a-blue-moon indulgence.
According to him, a regular fish and chips dinner, which cost approximately £8 a year ago, is now priced at £10.20. And by January, he anticipates having to raise the price to as much as £16.
Today, proprietors of fish and chip shops criticized Kwasi Kwarteng’s mini-budget for not doing enough to support the beleaguered business (stock image)
In a few of months, Londoners may have to pay over £20 for a normal fish and chips, as many restaurants in the city now charge £15 for this dish.
Today, the president of the National Federation of Fish Friers, Andrew Crook, criticized the government for assisting “bankers, not bakers and financiers, not fish friers.”
Reflecting on today’s statements, which included a pledge to abolish limitations on city bonuses, he stated that the budget had “totally missed the mark.”
Mr. Cook stated, “This was a chance to alleviate the strain on small businesses, as it is not just a job for us, but a way of life.”
However, they have entirely missed the mark with this money.
The hospitality industry as a whole had hoped for a reduction in the value-added tax (VAT) and reforms to ensure that the system changes moving ahead, but this has not occurred.
And sadly, they have prioritized bankers over bakers and financiers above fish fryers.
Andrew Crook, president of the National Federation of Fish Friers, criticized today’s announcements, stating that they failed to alleviate the strain on small firms.
Mr. Cook, who also operates Skippers chip business in Euxton, Lancashire, remained optimistic that the government will provide additional assistance later in the fall.
However, he feared that many chip shop owners would go bankrupt during the winter season, as cod prices had soared by 75% in addition to bill increases.
He stated, “It is simple for larger companies to continue acquiring businesses and developing, but we cannot.” We are hardly able to keep our heads above water.
“I was looking forward to arranging a promotion to help pull the industry out of its current slump, but we now anticipate a dark period following the holidays.”
Richard Coleman Ord, age 29, who is the sixth generation of his family to own a fish and chip restaurant, stated that the budget was “nowhere near” what the industry required.
He stated, “For small businesses, this is devastating. I believe there was a significant emphasis on the growth of the economy through large enterprises.
‘However, it has left smaller enterprises in general extremely isolated. We’ve been let down rather badly.’
He continued, ‘It’s fine to cut tax rates, but you have to earn money in order to pay taxes, and many of us won’t be in business for much longer.
The situation is absolutely, extremely dire, and we need assistance for our tiny family business. Currently, we are not receiving any.’
Due to escalating prices, Steven Dhillon, whose family runs the award-winning Fisherman’s Bay chippie in Whitley Bay (pictured), stated that the price of a regular fish and chips might rise from £10.20 to as much as £16 by January.
Mr. Coleman Ord was fortunate that his South Shields chip shop, Colmans, had an energy price strategy in place for the next 18 months.
During the cost of living crises, however, he stated that increases in the cost of raw materials had made trade exceedingly turbulent.
Even though we’ve been in business for sixty years, he stated that the prices of potatoes, salmon, and oil have increased beyond our wildest expectations.
“The only way we could compensate for that, including energy, would be to reduce VAT and corporate rates, like they did for the pandemic.
‘It should be the same for current crisis because, truthfully, it is worse than the pandemic. It poses a considerably greater threat to corporations than the pandemic ever did.
Mr. Coleman Ord said that the steps proposed by the government to uncap bankers’ bonuses left a “bad taste” in the mouths of a large number of small firms.
He stated, “It leaves an unpleasant taste in people’s mouths.
“I understand the reasoning behind it – boosting growth to particular industries – but once again, it is aimed at large firms and higher-earning individuals.
“For the vast majority of individuals seeking relief and assistance, it feels a bit in your face, and we are disappointed,”
The statement by the Chancellor that he would remove the restriction on bankers’ bonuses was one of the most politically contentious components of his mini-Budget.
Current regulations limit bonuses to no more than two times salaries, which, according to critics, is driving the finest staff away from the City.
During Boris Johnson’s tenure as prime minister, the idea of removing the cap was considered, but ultimately abandoned out of concern for its optics during a cost-of-living crisis.
Mr. Kwarteng, however, stated that it had only served to increase pay and impair London’s capacity to compete with Paris, Frankfurt, and New York.
In addition, the Chancellor stated this morning that he will eliminate the 45p tax rate for about 660,000 taxpayers earning over £150,000, saving them an average of £10,000 each year.
The additional rate will be eliminated in April, meaning that all income exceeding £50,270 will be taxed at the present, higher rate of tax of 40%.
Next year, those earning £20,000 will save £74.30 due to Mr. Kwarteng’s increases to income tax rates, while those earning £50,000 would save £174.32 and those making £200,000 will save $2,877.
In addition to reducing income tax, the Chancellor indicated today that he will eliminate the increase in National Insurance contributions as an additional boost for employees.
Former Chancellor Rishi Sunak implemented the 1.25-percentage-point increase in April. However, this will be rectified as of November 6th.
What did the Chancellor announce at a glance?
In April of next year, eliminate the 45p tax rate paid by people earning more than £150,000.
Annual cost: £2 billion
1p reduction in basic rate of income tax carried forward to April 2023 by one year
Annual cost: $5 billion
No stamp duty is payable on property acquisitions up to £250,000 and first-time buyers up to £425,000.
Annual cost: £1.5 billion
Reintroduction of tax-free shopping for tourists from abroad
Annual cost: £2 billion
Alcohol duty is anticipated to reach 7 pence per pint of beer and 38 pence per bottle of wine next year.
On November 6th, the increase in National Insurance contributions will be canceled.
Annual cost: £15 billion
Cancellation of next year’s Corporation Tax increase, meaning the rate will remain at 19 percent.
Annual cost: £18 billion
Businesses in 38 new ‘investment zones’ will receive tax cuts and the elimination of planning regulations.
Not stated annual cost
The elimination of the bonus cap for bankers in an effort to stimulate the City
Cost yearly: Zero
Total annual cost with additional measures: £45 billion
Mr. Kwarteng is also cancelling the Health and Social Care Levy, a separate levy that was scheduled to replace this year’s National Insurance increase in April.
The Treasury predicts that approximately £135 will be saved on average by 28 million people across the United Kingdom.
The levy was supposed to generate approximately £13 billion annually; however, the Chancellor has today pledged to continue funding for the NHS and social care at the same level as originally intended.
Mr. Kwarteng told the House of Commons that his tax measures were part of a “new approach for a new era” as he and Ms. Truss sought to “unlock the country’s great potential.”
He stated that the reductions will make Britain’s income tax system “one of the most competitive and growth-friendly in the world.”
The ’emergency budget’ also included the confirmation by the Chancellor of a ‘Energy Price Guarantee’ to cap the price of energy and gas for families.
This means that the average energy cost for a household will remain at £2,500 for the next two years.
Stamp duty is being eliminated for properties worth up to £250,000, while first-time purchasers will be exempt for up to £425,000, removing 200,000 people from the system.
Beer, wine, and cider duty increases are being canceled, and in an effort to boost tourism, VAT-free shopping will be made available to foreign tourists.
Across the nation, dozens of low-tax and low-regulation “Investment Zones” will be established, and new businesses will receive incentives such as exemption from business rates.
Mr. Kwarteng emphasized the need to address a long-term problem in the United Kingdom.
He stated, “Growth is not as high as it should be.” We are committed to breaking this pattern. We require a new strategy for a new era.
However, he faced concerns this evening as analysts expressed anxiety over the large borrowing needed to repair the hole in the government’s finances, with projections that the annual deficit might now exceed £190billion and remain high for years.
And after the so-called mini-budget from Chancellor Kwasi Kwarteng was announced, consumer money expert Martin Lewis described the Government’s financial strategy as’staggering.’
He tweeted, “That was a truly astounding statement from a Conservative Party government.”
“Massive new borrowing concurrent with tax cuts.” It’s all geared toward economic expansion. I truly hope it will work. I am quite concerned about the consequences if it does not occur.