Commenting on Chancellor Philip Hammond’s Budget today (Wednesday 8 March), Phil Smith, Managing Director of Business West said:
“They say that the Budget is more about political theatre than changing economic reality, and this performance would have had business audiences shifting in their seats.
“This was an underwhelming Budget from the Chancellor, with limited eye catching announcements and a lack of major changes for businesses to welcome, and a few announcements that will make them nervous.
“In some measure this was forced upon the Chancellor. With Brexit creating considerable uncertainty over the coming two years, it is not a time to spend freely. However, even the Chancellor’s limited wiggle room was smaller than expected – as the medium term growth projections announced have deteriorated, despite a short term boost to growth this year.
“Businesses will nonetheless be disappointed with what was announced.
“There has been some shift to ease the pain of business rates revaluation – with help targeted at growing smaller businesses who are leaving behind small business rate tax relief, a populist handout to pubs and the creation of a fund to help local authorities ameliorate the worst cases.
“However, if you aren’t a pub or don’t qualify for smaller business rate relief you’ll be left wondering what relief is available to the often sharp increases in tax you will be expected to pay. Many businesses will continue to feel they are being unfairly squeezed by rate rises that do not reflect their ability to pay or their profitability.
“The self employed have also been targeted with higher tax rates – with rises in Class 4 NIC. Self employment falls outside of the government’s election pledge of a “tax lock”, so this group now finds themselves targeted as a way to raise revenue.
“The self employed have been the bedrock of employment growth in the UK since the great recession, and tax changes here may make many nervous. It remains to be seen whether it will dampen entrepreneurship or reduce the incentives to set up business by yourself.
“The introduction of ‘T Levels’ to raise the status of technical and vocational qualifications was welcome, but must be backed by proper resources and reform if the aim of having a higher status to qualifications is borne out in their real world perception by future employers.
“Overall this Budget gave the impression of steady as she goes, more in preparation for a possible rough sea ahead than in a expectation of finding vast new lands of undiscovered prosperity.”