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, which includes Bristol Chamber of Commerce: “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."
Rob Brown, tax director at accountants BDO’s Bristol office: “We predicted and very much welcome the reduction in the corporate tax rate to 24% from April 2012, 23% from April 2013 and 22% from April 2014. We trust that this is a pre-cursor to an ultimate target of a 20% tax rate at the end of the Parliament, which is vital to UK plc as global corporations focus on the headline rate of corporation tax when considering where to locate new business activities. It is imperative that the UK stays ahead of the curve in attracting foreign direct investment and thereby creating much needed employment opportunities. Thankfully, the Chancellor has not made business pay a price for the lower corporation tax rates by further reducing capital allowances, which now approximate to economic depreciation in most cases.”
Bonnie Dean, chief executive, Bristol & Bath Science Park: "By increasing research and development (R&D) allowances the budget today sends out a broadly positive message to South West companies, large and small, which are engaged in (R&D). This is particularly important in a region which has some of the most advanced research-led companies in the world. Investing in research and taking it to market are long-term endeavours and it is essential that the Government make these allowances consistently available for years to come. The Chancellor's decision to maintain the reduction in the Annual Investment Allowance is a concern because it may have a negative impact on advanced manufacturing. Changes in technology are so rapid now that companies need to replace capital equipment more frequently in to maintain their competitive edge."
Angus Bauer, corporate tax partner in the Bristol office of law firm Ashfords: “The Chancellor's clear message delivered in today's Budget is that Britain is open for business. Measures introduced to stimulate business include the reduction in corporation tax, simplified regulation and increased tax allowances, and access to funding. A special focus on the technology, aerodynamics and animation sectors will undoubtedly be well received locally. Furthermore, the possibility of enterprise loans to assist young people looking to set up their own business will hopefully help Bristol to continue to develop new and exciting local opportunities. Finally, the introduction of ultrafast broadband and high speed wireless for Bristol is great news.”
Roger Jones, managing director, Bath Ales: “The beer duty rise, although widely predicted, is unfair to brewers, to pubs, to pub customers, beer drinkers and to all of us that live relatively modestly and enjoy simple pleasures. Brewers and beer lovers help bailout the banks, chip in to fund Quantative Easing and generally do our bit to help re-jig the British and World economy – and beer duty continues to increase no matter what. In my view the hike in beer duty is simply unjust in the context of how brewers and pub operators have been hit year after year.”
Fraser Mackay, head of region for Barclays: “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.”
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.
John Cridland, CBI director-general: “The Chancellor has painted a clearer vision of how the UK will earn its living in the future and, by seizing the opportunity to make sure our corporate tax system is more internationally competitive, he has sent a powerful signal to companies to invest, do business and create jobs in the UK. With many calls on the Chancellor to spend money he didn’t have, the best news for businesses is that he stuck to his guns and delivered a fiscally neutral programme. If businesses were looking for more, it was in the area of deregulation. For smaller businesses, things may not feel very different on the ground. It would have also have been a huge relief if the Chancellor had taken the opportunity to get rid of the currently unworkable Carbon Reduction Commitment.”
PUBLICATION: Bristol Business News, Bristol 24-7, 21 March 2012