National business leaders welcomed a number of moves in this afternoon’s Budget, particularly those aimed at helping small firms. But there was concern over how the Chancellor will meet his deficit reduction target.
The CBI called it a “stable Budget” for business facing global stormy waters.
Director-general Carolyn Fairbairn said: “The Chancellor has listened to our concerns about the mounting burden on firms and chosen to back business to grow the economy out of the deficit.
“Businesses will welcome the Chancellor’s permanent reforms to business rates – taking more small firms out of the regime and changing the uprating mechanism from RPI to CPI, which the CBI has long been calling for. The reduction in the headline Corporation Tax rate sends out a strong signal that the UK is open for global business investment.”
The Institute of Directors (IoD) welcomed a number of measures which will help small and medium-sized businesses, including relief on business rates, capital gains tax and a further cut to corporation tax. However, it raised questions about how the Chancellor intends to run a Budget surplus by 2019/20.
Director-general Simon Walker said: “There was plenty in the Budget for small and medium-sized businesses. They will welcome measures including more relief on business rates and cuts to capital gains tax, and a further corporation tax reduction coming in a few years.
“Business leaders and workers alike will be pleased with increases to the income tax personal allowance and the higher rate thresholds next year, while the introduction of a lifetime ISA will be a big boost for young people who have been put off by the inflexibility of pensions.
“The announcements of new infrastructure will be welcomed by IoD members, both in London and across the North. They key with new roads and rail links is getting spades in the ground. Businesses in Northern cities have been waiting a long time for these improvements, and cannot afford to see the protracted delays we have endured on other major infrastructure, such as airports.
“The UK faces risks on many fronts, and much heavy lifting will still be required to get rid of the deficit by the end of the Parliament. For a Chancellor who correctly prizes maths education, although he’s come up with a good answer, he hasn’t yet shown us enough of his working on how he plans to get there.”
The British Chambers of Commerce said its members had wanted a steady, workmanlike Budget – and that’s what they got.
But the Food and Drink Federation was angry with the Chancellor’s announcement that a tax on sugar-laden drinks is to be introduced, dismissing it as “a piece of political theatre”.
Director-general Ian Wright said: “We are extremely disappointed by today’s announcement of a new tax on some of the UK’s most successful and innovative companies. For nearly a year we have waited for an holistic strategy to tackle obesity. What we’ve got today instead is a piece of political theatre. The imposition of this tax will, sadly, result in less innovation and product reformulation, and for some manufacturers is certain to cost jobs. Nor will it make a difference to obesity.”
TUC general secretary Frances O’Grady said the Chancellor’s ‘gamble’ wasn’t paying off.
“Far from increasing growth, he’s had to downgrade his forecasts and accept that his plan is failing on productivity and pay,” she said. “Real earnings next year are set to grow even more slowly than he’d previously announced. And he’s had to admit that overall government debt is up too.”
