Local regeneration bolstered by launch of Levelling Up fund
Commenting on the publication of the prospectus for the £4.8 billion UK-wide Levelling Up Fund in today's UK Budget, Alexander Rose, director at DWF said:
"Local regeneration has been bolstered by today's launch of the £4.8 billion Levelling Up Fund, which will provide significant public funding towards high value local infrastructure projects. What’s interesting is that those projects will be put forward by local councils and championed by local MPs. This is a fresh approach to regeneration, which should hopefully give rise to interesting initiatives."
Key contacts: Alexander Rose & Jonathan Branton
Extension of stamp duty holiday announced
Lee Pickett, partner and housing law specialist at global legal business, DWF, comments on the extension to the stamp duty holiday.
He said: "Whilst this will be welcome news for the housing market, it will also be met with caution as it merely kicks the can of the withdrawal effect down the road a little. We have certainly seen developers concerned about unhappy customers who, through no fault of theirs, would miss out on the SDLT holiday due their new home not being ready for legal completion in time. Equally, various supply chain and labour availability pressures resulting from the pandemic and/or Brexit, are likely to be key factors in developers being unable to deliver homes before expiry of the SDLT concession period.
"There is an alternative view that the market was functioning well enough when the SDLT holiday was introduced and it simply pushed up prices, removed the advantage first-time buyers had and reduced tax revenue at time when it is most needed. Perhaps the compromise might have been to distinguish between transactions and chains involving new build properties and those which only involve existing housing stock. That, however is not what the Chancellor has decided to do and perhaps that is to do with simplicity of application among other factors."
Key contacts: Lee Pickett, Melanie Williams, Joanna Wojnarowska
Extension of furlough scheme a lifeline for employers
Joanne Frew, head of employment law at DWF, comments on the Chancellors announcement on extending the Coronavirus Job Retention Scheme (CJRS). She said:
"With the latest ONS figures showing the UK unemployment rate at 5.1%, the extension of the CJRS to the end of September will be a lifeline for employers. The CJRS has protected over 11 million jobs since it was launched in March 2020. This further extension should help protect jobs over the coming months when restrictions are due to be lifted and the economy can begin to re-open.
"With the clear four step strategy aiming for restrictions to be lifted by 21 June 2021, the extension of the CJRS to September 2021 allows a degree of flex, (1) for the opening up to be delayed if the data on COVID cases requires this and (2) giving businesses breathing space to get up and running before furlough support comes to an end."
Key contacts: Joanne Frew, Kirsty Rogers, Charlotte Lloyd-Jones
Opportunity to 'turbocharge' the economy for retail and hospitality
Dominic Watkins, Head of Retail, Food & Hospitality at DWF and Joanne Frew, Head of Employment, comment on the opportunity to 'turbocharge' the economy in retail and hospitality, and the Coronavirus Job Retention Scheme extension.
Dominic said "The budget is positive for the retail and hospitality sectors, as the difficulties of business rates have remained front of mind and the reduction in VAT will make a significant difference to those who have not been able to trade.
"The reduction in VAT, if passed on to consumers, will hopefully help to stimulate demand and ensure that as we exit COVID-19 the hardest hit areas of the economy have a year to improve, with consumers enjoying up to 15% lower taxes for another 6 months.
"It also raises questions about what will be done in order to help those 700,000 people who have lost their jobs, to get back into work. Perhaps there is an opportunity to turbocharge the economy by supporting the new skills necessary to drive the increasingly digital sector forward.
"While welcome for small businesses the grants for retail and hospitality businesses are unlikely to make much difference. While they may cover some rent costs for a very small business in reality they barely scratch the surface for most. Things there are likely to get more challenging before they get better as cash flow becomes ever more difficult."
Joanne also commented, "With the latest ONS figures showing the UK unemployment rate at 5.1%, the extension of the CJRS to the end of September will be a lifeline for employers. The CJRS has protected over 11 million jobs since it was launched in March 2020. This further extension should help protect jobs over the coming months when restrictions are due to be lifted and the economy can begin to re-open.
"With the clear four step strategy aiming for restrictions to be lifted by 21 June 2021, the extension of the CJRS to September 2021 allows a degree of flex, (1) for the opening up to be delayed if the data on COVID cases requires this and (2) giving businesses breathing space to get up and running before furlough support comes to an end."
Key contacts: Dominic Watkins & Joanne Frew
Green energy projects should be prioritised by new Infrastructure Bank
Commenting on the Chancellor's announcement to create the first ever UK Infrastructure Bank to be based in Leeds, Darren Walsh, energy sector partner at DWF said:
"We welcome the Chancellor's announcement to create the first ever UK Infrastructure Bank to be based in Leeds with in initial capital of £12billion. We note that the first projects will cover port infrastructure; but we are hopeful that green energy projects will be prioritised to facilitate the enhancement of the Prime Minister's Ten Point Plan for net zero carbon and a drive towards our green revolution.
"Ensuring a balanced portfolio of green energy and infrastructure projects will be essential and we hope that nascent green technologies such as tidal and hydrogen are supported as well as seeing further development of on-shore wind and solar PV. This is further great news for sponsors, developers and investors and the entire low carbon supply chain."
Key contacts: Darren Walsh, Allison Page
Freeports will oil the wheels (or the hulls) of the shipping sector
Jonathan Moss, partner and head of Marine and Trade at DWF, comments on the announcement of eight new Freeports in today's UK Budget:
"Freeports underline their dual economic contribution: locally, through job creation and in stimulating investment in regions across the country that need it – and, more widely, in facilitating the expansion of the UK's trade with the rest of the world.
"This is achieved through tariff and documentation exemptions - oiling the wheels (or the hulls) of the shipping sector, with a cautious optimism to reinvigorate the UK's economic position in a post-Brexit and post-Covid international marketplace.
"The Chancellor's proposal in today's Budget aims to set in motion not only a revival of, but also an improvement on, the UK's historic maritime trade capabilities – providing an opportunity for competitive advantage as a trade and logistics platform.
"The creation of special economic zones could act as a catalyst for international trade and regional regeneration. With more than 30 areas of the country reportedly bidding for these freeports, it seems many share the Chancellor's optimism."
Key contacts: Jonathan Moss
