Swindon’s manufacturers and tech firms were given help on a number of fronts to build on the recovery in today’s Budget.
Business West, the organisation behind the Swindon & Wiltshire Initiative, said the Chancellor had delivered on many items on its wish-list.
Ian Larrard, director of Business West in Swindon & Wiltshire, pictured, said: “Business wanted a Budget that was disciplined, focused, and geared towards the creation of wealth and jobs – and that’s what the Chancellor has delivered.
“With a huge confidence gap still separating employers from young job-seekers, we are very pleased to see the Chancellor heed our call to help firms take on and train tomorrow’s workforce. Overcoming that confidence gap means more investment in young people, more apprenticeships, and more jobs, which are critical with more than 661,000 16-to-24-year-olds economically inactive in the South West.
“Osborne’s focus on exports, investment, house-building and economic resilience passes the business test. By making a better business environment his top priority, the Chancellor has recognised that successful and confident companies are the key to transforming Britain’s growing economic recovery into one that is felt in homes and on high streets.
“As with any Budget, there were some populist measures that were not at the top of business’s wish list. Luckily, these were outweighed by measures to support business growth and wealth creation.
“Many of these measures bode well for now, and for the future. Yet the nurturing of a truly great economy requires more action than one Budget can deliver. At the upcoming General Election, all our political parties must commit to a long-term programme that transforms our infrastructure, a much stronger skills and education base, access to finance and support for growing companies, even more export support and a clear, consistent tax environment. Otherwise some of the Chancellor’s welcome moves might not have the desired effect in years to come.”
Dominic Bourquin, pictured, corporate tax partner at Swindon accountants Monahans, said the Chancellor had listened to pleas from the manufacturing sector not to stifle growth and help it invest in new machinery and enter export markets.
“The £7bn package to help businesses lower their energy costs is very welcome,” he said.
He also approved of the increase in the Annual Investment Allowance (AIA) from £250,000 to £500,000 – especially as it was to have been cut back to just £25,000 this year.
“Most manufacturers in the area employ fewer than 10 people so it won’t apply to them but it does send out the right signal,” he said.
The Chancellor’s announced increase in the repayable credit for loss-making businesses to 14.5% from 11% was also a positive step as was making the Seed Enterprise Investment Scheme permanent – a move which will help start-ups.
“There were a lot of small things in this Budget that may not cost the Exchequer a lot but all add up to help for businesses as we come out of very tough times,” he said.
“However, the one thing that we had hoped to see but didn’t even get a mention was reform of business rates.”
Malcolm Emery, partner at law firm Thrings, which has its largest office in Swindon, was surprised the Chancellor did not provide a further economic stimulus by reducing the standard rate of VAT.
Mr Emery, pictured, a dual-qualified chartered tax adviser and solicitor, added: “While the ongoing commitment to reduce the rate of corporation tax is to be welcomed, the number of individuals caught in the 40% tax bracket has increased by 25% since 2010.
“This puts more pressure on individuals who operate as sole traders or via partnerships, and many people will argue Mr Osborne could have done more to minimise the tax burden on small and medium-sized businesses.
“Meanwhile, the pension reforms and the introduction of a single new ISA with its annual tax-free savings limit of £15,000 are a welcome surprise, and stand to offer business owners the opportunity to plan for the future in a tax-efficient way.”
The EEF, the manufacturing industry organisation, said George Osborne “deserved a pat on the back” for addressing the needs of manufacturing.
South West director Phil Brownsord said: “Manufacturers in the South West should be delighted – the Chancellor said this would be a Budget for manufacturing and he has more than delivered on his word. The Government has sent a strong message that it clearly recognises the need to make the competitiveness of the UK a priority and this will benefit hard-working companies across our region as well as up and down the country.
“We made a strong case for the need to reduce the rising cost of energy faced by so many companies and the Chancellor has acted on that. Taken together with measures to boost investment, exports and skills, the Chancellor deserves a pat on the back. We have always said that to achieve a resilient recovery the Government must back manufacturing and we’ve seen that from this Budget.
“We now have some of the building blocks in place which will help rebalance the economy. But, as the Chancellor suggests, there’s still more work to be done. We now need to take steps which will lead to longer-term solutions beyond current spending and electoral cycles. This will finally give business the predictability and certainty to encourage the successive rounds of investment our economy needs.”
The Society of Motor Manufacturers and Traders (SMMT) also welcomed the Budget’s key aim of supporting UK manufacturing as part of a balanced industrial strategy and the steps to encourage investment and exports.
With thousands of Swindon workers’ jobs, such as those at Honda, BMW and their supplier firms, dependent on the success of the UK car industry, any steps taken to boost investment will have an impact in the town.
The measures to encourage exports were particularly welcome, the SMMT said. With around 80% of vehicles manufactured in the UK exported to more than 100 global markets, these measures will help boost the UK supply chain as well as reaffirm the decisions of global vehicle manufacturers and suppliers.
Plans to double the Annual Investment Allowance to £500,000 and extend it to 2015 were also welcomed as a way of encouraging auto industry businesses to invest further in plant and machinery.
The domestic auto supply chain presented a great opportunity for growth, said the SMMT, so the Chancellor’s commitment to increase the R&D tax credit for loss-making SMEs from 11% to 14.5% from April would be welcomed by suppliers across the UK.
However, it said the system also needed to work for bigger businesses.
With rising energy costs among the biggest challenges facing businesses, the £7bn energy package was helpful and the Carbon Floor Price freeze would limit the competitive disadvantage faced by UK automotive manufacturers and suppliers.
SMMT chief executive Mike Hawes said: “The Chancellor’s focus on investment, exports and skills, as well as reducing energy costs for manufacturing, is welcomed by the automotive industry.
“Extending and doubling the Annual Investment Allowance and improving export finance are important signals to encourage the UK’s manufacturing base, helping trigger greater business investment and enhancing our export capability.
“In line with welcome reductions in energy costs, we ask government to look at business rates to ensure the system works for manufacturing and maintain our global competitiveness.”
He also welcomed measures to extend incentives for ultra-low emission vehicles (ULEVs) under the company car tax regime.
“Industry needs clear direction from Government on how its £500m commitment to develop the ultra-low carbon vehicle sector between 2015-2020 will be allocated.”
There was also a thumbs-up for the Chancellor’s reforms to the savings market.
Barclays Community Leader for Bristol, Swindon and Bath, Mark Hatcliffe, said: “Our customers will welcome the ISA changes announced in today’s Budget by the Chancellor.
“Savings are an important part of personal financial planning and tax-free savings provide many with the opportunity to save efficiently for future key life events such as buying a home or going on holiday, as well as having money put aside for a rainy day.”