Budget 2013: Case studies

PEOPLE from around Scotland give their take on the Budget

‘The icing is good but the mix needs refinement’

With many of her products delivered directly to customers, Liggy’s Cake Company owner Liggy Morgan is relieved that this year’s 3p fuel duty rise has been scrapped.

Since she opened her original shop in Edinburgh’s West End four years ago, the threat of inbuilt rises in the tax on petrol and diesel has hung over the business, although many of the scheduled “escalators” were repealed at the last minute by George Osborne.

“I was quite concerned to see what they were going to do with fuel,” she said. “It’s an ongoing cost for us and it has just risen and risen. Sometimes we use delivery companies, but there’s still a knock-on effect.”

Having opened a second shop – in Glasgow – last year, Ms Morgan will save on her personal travel costs.

She is also pleased that the rise in personal tax allowance to £10,000 next year will give her staff an extra reward – and the planned tax break on childcare may prove a winner all round.

“We are an all-female team, so that is something that could help retain staff, as otherwise it might not be cost effective for someone to come back to work [after having a baby],” she said.

However, the change to employers’ National Insurance is unlikely to see her take on more staff – the main worry for a small firm is rules on getting rid of an employee if things do not work out, she said.

‘Jobs tax boost for electricians, but no help for renewables’

A NATIONAL insurance allowance worth £2,000 from the Chancellor sparked a positive reaction from Nikki Brooke, who runs an electrical contracting business in Perth.

“When we are looking at taking on bigger projects then this will help us to take on more staff,” she said.

“The cut to corporation tax is good news, too. It means that we won’t be penalised for growing the company.”

Her firm, Quantum Energy, has also expanded into fitting solar panels for homeowners, housing associations and construction companies, including Stewart Milne.

However, Ms Brooke was disappointed that there were not any obvious measures in the Budget to stimulate demand for renewable energy.

“There was help for the shale gas industry but not renewables as far as I could see,” she said.

Ms Brooke was encouraged by news of tax incentives for low emission cars, as her firm is considering expanding into the market for charging points for electric vehicles.

‘Back to square one on fuel with no light at end of tunnel’

AS AN operations manager for a courier firm, Neil Porteous was keen to see if the Chancellor would do anything to cut the cost of fuel.

The 42-year-old father-of-two also spends about £250 a month on petrol because of his commute to work from his home in Musselburgh to Bathgate. So he was relieved to see the planned 3p rise in fuel duty for September scrapped.

“The biggest thing that concerns me is the freeze on fuel duty,” he said. “Apart from my mortgage that is my biggest expenditure every month.

“Having said that, petrol has gone up by around 6p since the beginning of the year and then gone down by 3p – so we are back to square one. It would have been nice to see a reduction in duty – particularly for businesses.”

Mr Porteous said he doubted his family would benefit much from the introduction of tax breaks on child care.

His children Cameron, 11, and Abbie, seven, are now at school, attending after-school clubs which cost between £100 and £150 a month.

“It might have made a difference when the children were younger but it won’t make that much difference now,” he said.

He added that the cut in beer duty would not make much difference to most families. “I don’t know many people with children who can afford to go out and drink in pubs. But we do all know that pubs are closing at a rate of knots.”

He said the most worrying thing in the Budget was the overall outlook. “The rate of growth has gone way down and suggests there is not a lot of light at the end of the tunnel for anybody.”

‘I don’t know how people on pension make ends meet’

“I’M very lucky because my husband is still working,” says Carola Gordon, a pensioner aged 72.

“We paid off our mortgage 20 years ago and my husband gets considerably more than someone living on just a pension.

“But I really don’t know how people who just have a pension to live on manage. I really don’t.”

Ms Gordon, from Edinburgh, said she did not think the Chancellor’s announcement of a basic pension of £144 a week, to be brought forward to 2016, would bring much cheer to people living on a small income.

“The cost of everything is increasing,” she said. “The price of household energy bills is huge and the cost of food is rising.”

She said previous Tory government decisions to sell off the energy companies and public transport had led to decades of rising prices, while the decision to sell off council housing had also led to the current housing crisis.

“The best thing they could do is renationalise,” she said. “I do feel for young people who have no way of getting on the property ladder.”

However, Ms Gordon said she did not think there was a lot George Osborne could do given the current economic climate.

“From what I can see he is in quite a pickle. I can’t see him making very much difference at all. I think the country is really in quite a mess.”

The Chancellor also came in for criticism from Ms Gordon for his decision to scrap the beer price escalator. She said she would have been happy to see the price of beer continue to go up.

“We have all heard about pubs closing, but frankly I don’t care. So much damage is done to people’s lives and people’s health because of alcohol.”

‘Anything that helps to stimulate investment is very welcome’

INCREASES in research and development (R&D) tax credits were given the thumbs-up by Tommy Cook, chief executive at Calnex, a technology firm in Linlithgow, West Lothian, that makes hardware and software for testing telecommunications equipment.

“Anything that helps to stimulate investment in the technology sector is welcome,” said Mr Cook. “Our industry is heavily dependent on research and development. Your product may be great now, but you’re always looking for the next product.

“I’m not sure if the extension of capital gains tax relief on the Seed Enterprise Investment Scheme will affect our firm

directly, but all of the steps like that are a welcome boost.”

Mr Cook added that, with bank account savings rates being so low, he hoped more investors would take a look at technology companies.

Calnex already employs about 50 people, and Mr Cook plans to hire more staff this year.

“Although I think the employment allowance for

national insurance contributions is aimed at smaller businesses than us, every little bit of help is welcome,” he said.

“I wasn’t expecting any direct help from the UK government on exporting, although the weakness of the pound is

already boosting exports.”