The business community has given Alistair Darling’s first Budget a strictly qualified welcome.
Most praise came largely because the Budget contained “no nasty surprises” and was generally low-key.
Richard Lambert, the director-general of the CBI, said: “The Chancellor didn’t set the Thames alight, but then he didn't have anything to set it alight with. On the surface there are no nasty surprises, but his growth assumptions are optimistic and leave him with no room for manoeuvre should things take a turn for the worse.”
Mr Lambert continued: “The government has much to do if it is to win back its enterprise credentials, but the measures announced today are a credible first step on the road. Although the anger over capital gains tax is still simmering, entrepreneurs and smaller businesses will recognise that the government has made an attempt to listen.”
But he added that business still faces the burden of extra taxation: “For business, although there may have been no further big shocks in today's speech, we mustn't lose sight of the whole raft of tax rises announced in the previous Budget and the Pre-Budget Report. These are scheduled to kick in from April, putting a further squeeze on firms at this already turbulent economic time.”
John Wright, national chairman of the Federation of Small Businesses, agreed: “The Treasury’s dithering since the Pre-Budget report and a series of damaging tax rises in the last year have totally undermined the Government’s position with small businesses.
“Alistair Darling’s first Budget is unlikely to make that situation much better, but it is a relief that it will not make it any worse either. Finally it seems we may have an announcement from the Chancellor that doesn’t spring any nasty surprises on small businesses.”
On income shifting, Mr Wright said: “The deferral of plans to change income shifting rules, which would have forced tens of thousands of family businesses to create and maintain a massive amount of extra paperwork on individuals' contributions to their business, is welcome news. The plans should now be abandoned permanently.”
Also positive was the delay in implementing the rise in fuel duty.
Mr Wright commented: “We welcome the freeze on fuel duty until October, but the issue is unlikely to go away. The cost of fuel is damaging small businesses and their customers in every industry and every area of the country.”
He applauded plans to help fund new businesses and limit the effects of regulation: “Plans to reform regulation, improve access to finance by expanding the small firms loan guarantee scheme, help female entrepreneurs and for a goal to give at least 30 per cent of public sector procurement to small and medium-sized businesses all have our support. These plans will need to be backed up with real action.”
Responding to the Budget, David Frost, the director general of the British Chambers of Commerce, likewise criticised the tax burden that will fall on business.
Mr Frost said: “The pre-Budget Report last October brought in a series of changes that complicated the tax system, increased taxes and made the UK a less attractive place to come and do business. Unfortunately, the Chancellor has not repealed the bulk of these measures and the business community will still feel that the Government has used them as an easy target for the Treasury.”
But Mr Frost, too, was able to welcome the new initiatives supporting smaller businesses: “It was good to hear the Chancellor make specific reference to the SME community however and we welcome initiatives such as the small firms loan guarantee and the plan to impose a limit on the amount of regulation that can be imposed by Whitehall departments. It was also heartening to see the Government set a goal of SMEs winning 30 per cent of all public sector contracts over the next five years.”
The Forum of Private Business also welcomed measures pledging an additional £12.5 million to assist female entrepreneurs start businesses and extra Capital Allowances to help firms introduce more environment-friendly commercial vehicles.
However, the FPB statement questioned whether the Chancellor's announcements on Corporation Tax, CGT and income shifting backed up his desire to do more to support small and medium-sized enterprises.
Miles Templeman, director general of the Institute of Directors, said: “Business will be relieved by the apparently low key tone of this Budget, which is welcome after the recent ill considered and damaging announcements on CGT and non-doms.
“We welcome the decision to postpone the proposals on income shifting, which would have imposed an impossible burden on thousands of small businesses. The policy needs a fundamental re-think. More generally, the tax regime still needs to be simplified and made more business-friendly. The new enterprise agenda is taking us in the right direction, but as ever, everything depends on delivery.”
Date:13 March 2008
|
