Chancellor George Osborne opened his Budget by saying it would “unashamedly back business".
But did he succeed? Here are the views of a range of business leaders and professionals.
Phil Smith, managing director of Business West: “Business West is disappointed that the Budget hasn't delivered more for business. We needed a clear statement about business benefits to provide the confidence that businesses need to continue to deliver the private sector jobs growth necessary for economic growth. What we got was a Budget that focused on changes to the tax system, with some minor benefits to business given with one hand and taken away with the other – a further reduction in Corporation Tax but an increase in business rates at a time when businesses can ill afford it. Much more could have been done to support businesses to take on young people to give them a better chance in the world of work, so while we are pleased to see the idea of a youth enterprise loan scheme being considered, this doesn’t go far enough. Our Chamber members are ready and willing to do their bit, but need more help from government.
Mark Harden, partner, Swindon law firm Thrings: “There was help for businesses, particularly the cut in Corporation Tax, but the tax system is very complicated for many small businesses and I was surprised that the consultation will only be for firms turning over less than £77,000 which is tiny. Businesses much larger than this find it complicated. While there was some help with research and development, there wasn’t a lot for manufacturers and exporters – the two parts of the economy that have been highlighted for growth. As with any recent Budget, the devil will be in the detail.”
Chris Elias, relationship director at Barclays, Swindon: “The Budget has delivered some real benefits to the business community. The most notable of which is the National Loan Guarantee Scheme (NGLS) which will make £20bn available to small businesses across the UK. Barclays is one of a number of banks which have signed up for the new scheme and due to reduced funding costs will be able to pass on these cost savings direct to customers. The Barclays scheme is already up and running and any new qualifying loan from today will receive a 1% discount on the price of the loan over the first five years, but received immediately as an upfront cashback payment on day one, enabling businesses to benefit from the discount immediately and potentially reinvest into the business. To qualify a business must have an annual turnover of less than £50m.”
Myles Palmer, divisional director stockbrokers Brewin Dolphin, Marlborough: “The good news for our clients is that all the main tax reliefs have been left untouched – so pensions and ISAs continue to be the important investment vehicles they are today. Uncapped tax reliefs generally used in aggressive tax avoidance schemes – that is except charitable giving – will be capped from 2013 at £50,000 or 25% of earned income, whichever the greater. The cut in corporation tax will benefit those companies with significant exposure to the UK. We expect earnings estimates for the mid-cap companies, which are not as globally diversified as their larger peers, to improve on the bottom line. Overall, a Budget that is positive for business, positive for the regions and so should be supportive of equity markets.”
Gerry Jones, South West chairman, Institute of Directors: “The reduction of Corporation Tax faster than planned is a positive step in the right direction, which we have long called for. Britain urgently needs to become a competitive, low-tax economy, so the Chancellor must not deviate from this path. It will take time and serious action to rebuild this country’s reputation as a place which welcomes business, and reducing Corporation Tax year-on-year helps that process. We should be aiming for a Corporation Tax rate of 15% y 2020 – that would put Britain in a very strong position. However, the Chancellor has not gone far enough or fast enough on Income Tax. The 50p rate was hugely damaging, but at 45p we are still uncompetitive. Even after the reduction two-thirds of the OECD will still have a lower top rate. This fudge will do little to combat the impression that Britain is a high-tax country, where ambition is not welcome.