Swindon & Wiltshire Business News

A303 upgrade gets go-ahead in government's coronavirus-centered post-Brexit budget

Chancellor of the Exchequer Rishi Sunak

 

A controversial scheme to tunnel a two-mile section of the heavily-congested A303 near Stonehenge has been green-lit in today's Budget.

Delivering his first Budget to the House of Commons today, Chancellor of the Exchequer Rishi Sunak pledged £27 billion to be spent on road schemes between 2020 and 2025, and singled out the £1.9 billion A303 scheme.

A303 tunnel plans“There’s one more road I’d like to mention. It’s one of our most important regional arteries," he said.

"It is one of those totemic projects symbolising delay and obstruction. Governments have been trying to fix this since the 1980s. Every year millions of cars crawl along it in traffic ruining the backdrop to one of our most important historic landmarks.

"So to the many honourable and right honourable members who’ve campaigned for this moment, I say this: the A303 – this government is going to get it done.”

The announcement has been welcomed by English Heritage, which is responsible for the monument.

"As guardians of Stonehenge, English Heritage welcomes the news in today’s Budget that funding has been granted to improve the A303 as it runs past the ancient monument. We look forward to hearing whether planning consent for a tunnel will be granted," said the organisation.

"The Stonehenge World Heritage Site is famous throughout the world and is one of the most important prehistoric landscapes in Europe.

"Today this landscape is split in two by a major road - the A303 - which acts as a barrier to people enjoying, exploring and understanding the World Heritage Site.

"Removing the noisy and pollution-filled road and placing it within a well-designed tunnel will transform Stonehenge, reunite its severed landscape, and allow people to better enjoy the ancient stones and to discover the fascinating prehistoric landscape they stand in."

The announcement was also welcomed by Salisbury MP John Glen.

"After almost a decade of campaigning on the A303, I am absolutely delighted with today’s announcement in Budget 2020 that the Stonehenge Tunnel scheme has been given the green light," he said.

"The A303 Stonehenge scheme will reduce journey times to the South West on a major strategic route as well as tackle the scourge of congestion and rat-running in nearby villages."

Elsewhere there were major announcements on how the government would support businesses through the coronavirus crisis.

"A £30 billion fiscal stimulus to support British people, British jobs, and British businesses" was announced, with a temporary Interruption Loans Scheme seeing banks offering loans of up to £1.2 million to support SMEs and the HMRC scaling up the Time To Pay service.

A business rates holiday for tens of thousands of small businesses with a rateable value of less than £51,000 was announced, and extended to businesses in the hospitality industry with a rateable value above that level – including shops, cinemas, restaurants and hotels.

Measures to cover the cost to small businesses of sick pay were also announced. And there was also a freeze in fuel duty, and corporation tax was pegged at 19 percent – the lowest in the G20.

Meanwhile, buried in the small print was an announcement from the Office for Budget Responsibility that Brexit has led to the economy being two percent smaller than it would have been.

Reactions

The Federation of Small Businesses enthusiastically welcomed the Budget announcement, calling it "a pro-small business Budget, which has delivered a high streets bonus, a series of Conservative manifesto promises to small businesses, and emergency steps to support small firms through the coronavirus outbreak."

Dame Carolyn Fairbairn, the director-general of the CBI, said: “In deeply challenging times the Chancellor has worked against the clock to deliver two Budgets in one: a first for national resilience today and a second for economic ambition tomorrow. It’s a bold Budget at scale, coordinated with the Bank of England, which will help people and business through tough times.”

Michael BlakenLocally, Michael Blaken, account director at Optimum Professional Services, said: "In the main it was interesting, and nothing too alarming, but we need to see the detail, particularly around the offers for business, as regards helping them to get through the Coronavirus.

“National Insurance threshold for employees increasing was talked about but employers’ National Insurance wasn’t mentioned so we’re keen to see the fine print for this.

“Reforming Entrepreneurs’ Relief is a sensible measure, and will still help people selling their businesses. R&D relief is good news, but beware because HMRC is getting more curious about what is – or, more pertinently, is not – R&D.

“We also welcome the move to reinstate the time to pay arrangements that were originally introduced after the financial issue of 2008/09.”

Phil SmithPhil Smith, managing director of Business West, said: "Given the growing scale of the impact of coronavirus on the global economy – and also its likely impact on the UK – a strong statement of intent from the Chancellor is absolutely the right thing to do.

“The scale of the response was impressive. If the past few weeks has been about turning on the taps to wash our hands, here was the Chancellor turning on the UK’s fiscal taps to try and avoid the worst. It also shows welcome co-ordination with the Bank of England to help provide support direct to businesses and indirectly to their workers.

“For business his message was that this support would act as a ‘bridge’ to help cope with one-off stresses and make it through to a resumption of normality. When many businesses are feeling worried about how to cope, Rishi Sunak’s proactive firepower will be very welcome.

“This was a big-spending budget in the short, medium and long term, and although some of the measures were populist – with freezes on all alcohol duties – most of the money would be on capital expenditure: particularly on infrastructure. Much of this is very sensible.

"The UK has underspent on infrastructure for far too long – pursing a penny-wise, pound-foolish strategy. With global borrowing so cheap it makes sense to increase our spending on transport, housing, broadband, skills and research and development – all of which have the potential to boost long term growth.

“However, there remains a daunting global backdrop. No one yet knows how big a shock coronavirus will bring us. Today the ONS had already announced that growth from January to March had stalled to zero. The government’s growth projections had also been shrinking, even before coronavirus had been taken into account. And we still face major changes in our global trading relationships, and with the EU, when the transition period ends on the 31st of December.

“Some will, therefore, be nervous that this budget could be a hostage to fortune, reliant on continued benign global interest rates, a rapid return to growth, and with a needed clawback through higher taxes in two or three years’ time. A short term boost to help the UK out of a difficult place, we now place our faith that the future will take care of itself.”

Dominic Bourquin, corporate tax and corporate finance partner at MHA Monahans, said: "The small and medium enterprises that do so much to fuel UK PLC can take some comfort.

"Given that they are likely to suffer most as the measures to combat the coronavirus take their toll – employees self-isolating, plummeting sales, coping with fixed costs and diminishing cash flows – the Chancellor has produced some pretty quick wins."