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A Budget to save small rural business?

Friday 17 April 2009

Next week, Chancellor Alistair Darling will present arguably the most critical Budget since the end of World War 11. He is being asked to help save small rural businesses by giving them business tax relief – but our rural affairs commentator John Sheard doubts whether he has the will or the wherewithal to do so...

LIKE most voters in the UK, I am heartily sick of the never-ending torrent of bad financial news and the scandalous behaviour of the Government that has created this disaster. In normal circumstances, I would rather put a boot through my computer screen than write about a forthcoming Budget.

So forgive me, dear reader, for making an exemption and perhaps you understand if I give my reason: I simply want to see village shops and English country pubs stay open. And that, in the present economic circumstances, would be a major success story.So forgive me, dear reader, for making an exemption and perhaps you understand if I give my reason: I simply want to see village shops and English country pubs stay open. And that, in the present economic circumstances, would be a major success story.

Alistair Darling
Alistair Darling

It is not just me saying so. This week, several major national institutions came out with pleas of help for small rural business in next Wednesday’s Budget, which has already been postponed for a month so that Gordon Brown could bask in the glory of the G22 financial summit in London (but that’s another story).

This week, the Federation of Small Businesses (FSB) issued its Budget recommendations to Chancellor Alistair Darling and it included a call for a year’s 100% relief of business rates for rural shops, pubs, B&B’s and the like because between 300 and 700 shops are closing in the countryside each year – and 13 country pubs close every week!

Linda Walton, chairman of rural affairs and tourism at the FSB, which has more than 200,000 members, wrote: “The real threat to our countryside is the steady decline of our village shops, pubs and post offices – the backbone of village life.

“These businesses are not only the focal point of rural community life; they often play a wider role in supporting other small firms in the area. The collapse of one small village shop can have a drastic impact on the entire community.”

The question, of course, is whether Darling can afford to take such measures, lumbered as he is with the poisoned chalice handed to him by former Chancellor Gordon Brown who is gleefully crucifying this and subsequent generations with billions – some say trillions – of pounds of taxes in his bid to “save the world” (or rather, to pull out of the mire several British banks, notably two of them run by former Scottish mates of his).

I have my doubts – and have good reason for those, too, also from impeccable sources. The TaxPayers’ Alliance, a regular thorn in the Government’s fiscal side, also released a statement this week, which hinted – although it did not say it in such blunt terms – that many of the so-called “green taxes” already imposed by New Labour were a con (see News).

They add £15 a week to the average taxpayer’s bill and rarely achieve the environmental improvements they are supposed to bring about. One of the worst offenders here is the exorbitant tax on petrol and diesel, which rural motorists and businessmen have to pay through the nose.

Reason: small village garages are closing at an enormous rate because they cannot compete with the cheap fuel offered by the major supermarkets. But that means that a rural motorist often has to use a gallon of fuel or more to get to the supermarket to fill up. A fat lot of “green” sense that makes.

next week’s Budget will provide a useful yardstick as to the Government’s real interest in rural affairs

But if rural garages are closing by the dozen, country pubs are disappearing in their hundreds. One of the reasons is the huge tax on draught beers which, in my local, came very close to the £3 a pint mark this week – before any extra duty to be imposed in the Budget.

And I will wager a gallon to a gill that beer taxes (and those on wine and spirits, too) will go up for the simple reason that the Chancellor has got to find billions (£44 billion, according to one estimate) to even partially fill the black hole that Brown has created.

They will, of course, say that this is a measure to curb “binge drinking” so to hell with the country pub. Yet violent drunkenness is by far and away an urban problem – in the villages, there are too many neighbourly eyes to keep a watch on young folk out for a pint (or alco-pop) or three.

All in all, bad though I expect it to be, next week’s Budget will provide a useful yardstick as to the Government’s real interest in rural affairs. In recent months, it has made some soothing noises to appease rural anger about New Labour’s townie bias. The rural economy is of great importance, it said only a month or so ago. Next week we will see if they put our money where their mouth is.

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