Partner Article
The Budget Reaction
Businesses and industry organisations reacted on Wednesday to George Osborne’s Budget speech, made in the House of Commons.
Here are a selection of the comments made within the business community:
Former Dragon’s Den panellist and entrepreneur, James Caan, commented: “This is as an aspirational budget focused towards business where growth will prosper and create more jobs for the economy. The cut in corporation tax to 20% means we have one of the lowest in Europe.
“This is encouraging for more companies to do business in the UK and highlights that ‘Britain is open for business’. The private sector has been working hard to increase employment levels and the allowance to reduce the tax on employing people will help many small firms employ their first person and grow their businesses. This is a welcomed move and the most encouraging announcement from George Osborne’s budget today.”
The Forum of Private Business welcomed the Chancellor’s announcement that Government will scrap a beer tax escalator and cut duty by a further penny.
The Forum’s head of policy, Alex Jackman, said: “While many in the industry will see this as a George Osborne doing too little, too late, we still think it’s a victory for publicans up and down the country who’ve battled against steep increases during extremely lean times, and in an industry still struggling to find its way in post-cigarette ban Britain.
“But we mustn’t forget, the UK still has some of the most punishing alcohol duty levels in Europe, and while today’s development is good for the industry, we hope it won’t be a one-off crowd pleaser by the Chancellor. Ideally he needs to freeze beer duty for the foreseeable future and any increases down the line need to be sensible and proportionate, otherwise today will count for nothing.”
The Forum’s chief executive Phil Orford went on to comment on how changes to fuel duty could act as a helpful concession for business and the economy.
He said: “No one wants to see fuel prices any higher than they are and small businesses will welcome that. Let’s not forget though that prices are fast approaching record highs – any increase would have been reckless so this was just basic common sense.
“We still feel the Government needs to implement some kind of fuel stabiliser. The only way we’re going to see anything approaching a fair price for fuel in the UK will be via a mechanism that works to bring fuel tax down when prices are high. Such a system would mean prices as they stand now would not be hovering just shy of £1.50 and taking money from the pockets of consumers better spent elsewhere in the economy.
“Unfortunately the UK will now suffer for another year at the mercy of fluctuating oil prices right when we need it least because of the Chancellor’s failure to introduce such a system.”
John Cridland, CBI Director-General, said: “The CBI was clear this Budget needed to deliver a good dose of business and consumer confidence, while being necessarily fiscally neutral. We’re particularly pleased our call for a focus on the short-term boost of housing has been heeded, alongside an increase in longer-term big ticket infrastructure spending.
“An extra one penny cut in corporation tax will also make the UK one of the most internationally competitive locations in which to do business.This was recognition it was a mistake to cut capital spending so sharply and that other growth-boosting measures were taking too long. But by shifting £6bn to housing and infrastructure, the Government has sowed the seeds for growth and jobs.
“The new obligation on the Pensions Regulator acknowledged that the huge commitment employers are making to sustain pensions for employees cannot be separated from the drive for growth.
“Small and medium-sized businesses will be particularly encouraged that there was money available for the Chancellor to cut the jobs tax through a new employment allowance. We also need to remember the impact of business rates on the hard-pressed high street.”
O2 Business commented on the Chancellor’s announcement that jobs tax will be reduced for 450,000 SMBs and the promise of Growth Vouchers for businesses.
Ben Dowd, business director at O2 said: “Small businesses form the engine room of the UK economy, so initiatives like the small business Growth Voucher in the Chancellor’s Budget are crucially important. But it’s not just the responsibility of Government to support this important community of small businesses – big businesses have an important role to play too.
“For too long, business in the UK has worked in silos and it’s damaging our ability as a nation to innovate. If we’re to get our economy back on the road to growth, big businesses must take also responsibility by working more closely with small businesses to help them fulfil their potential.”
Law firm Grant Thornton looked at the positive moves made, but recognised the Government has missed its original targets set three years ago.
Tony Reddin from the firm commented: “Despite a larger than expected cut to 2013 growth and an admission that the government will miss its own debt target by two years, there was some good news for business in this budget.
“The new allowance which will knock £2,000 off the cost of employing people is a measure which equates to a genuine cash boost for small firms hoping to expand and create jobs. But while it has the potential to be a shot-in-the-arm it remains to be seen whether the hundreds of thousands of businesses which could benefit will have enough confidence to invest.
“The 20 per cent government assistance for people buying new-build homes is not only likely to be a crowd pleaser, but it should bring a tangible lift to the region’s construction and property trade. There’s no doubt that the demand for new homes is there, so this measure aligned with the mortgage guarantee scheme can only be a good thing. But as with all these things the detail is what matters – it will be interesting to see whether the measures are simple enough to translate into use.”
Jacqueline de Rojas, Vice President and General Manager, CA Technologies UKI commented: “The last year has seen the death of numerous businesses, both large and small. Today’s Budget goes some way to helping businesses survive in a struggling economy, which in turn will help avoid the UK heading towards a triple-dip recession. The planned reduction in corporation tax will ease the strain for UK companies, whilst at the same time making Britain a more attractive option for European businesses. Extra support for SMEs in the form of lending schemes and the reduction in National Insurance fees will also provide additional financial support in order to keep these companies alive.
“However, businesses cannot simply rely on the Government to keep them afloat. Government initiatives are important but businesses need to take control of their own destiny. For me innovation is at the heart of this. The organisations that invest in innovation through-out the economic downturn will be the ones to grow and flourish in the future.”
This was posted in Bdaily's Members' News section by Miranda Dobson .
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