So this year’s Budget was predictably again, all about austerity – but how did the business community fare this time around? Well, the chancellor was certainly effusive in his praise of the economy; stating that it now tops its pre-recession peak, and that for the first time in 30 years, the UK has higher employment rates than the USA.
Manufacturers and exporters were widely lauded as the future of the UK’s economy, with manufacturers set to benefit from a £7bn package to cut energy bills. Exporters will be looked after by changes to the export finance system, with the current pot doubled to £3m and lower interest rates for the loan scheme introduced.
Support was also announced for the building of more than 200,000 new homes, with a £500m fund unveiled for small housebuilders, along with the creation of a new garden city at Ebbsfleet. Further, the Help-to-Buy equity loan scheme is to be extended until 2020 – a move that should benefit housebuilders as well as homebuyers (check out our earlier post on this topic).
Locally, Mr Osborne confirmed a £270m guarantee for the Mersey Gateway bridge, as well as unveiling plans for an Alan Turing institute for research into Big Data. He also announced new centres for doctoral training, cell therapy and graphene – the technology developed at our very own University of Manchester. No detail was provided on where the institute or other centres would be located though.
Limited companies will also benefit from the ongoing cuts in corporate tax, down from 23%, to 21% and finally to 20% next year, along with grants to smaller businesses to support an additional 100,000 apprentices. In addition, the investment allowance scheme for business is to be doubled to £500,000 and extended to 2015.
In reality, and understandably given the government’s position on growing the economy, this was a pro-business Budget. However, there were perhaps a few things missing that business leaders would have liked to have seen. Retailers struggling on the ailing high street would no doubt have welcomed additional support, and the renewables industry a firm commitment on policy.
Further crackdowns on tax avoidance will be bad news for those that take a high-risk approach to their tax affairs, and residential properties priced at £500k and above and purchased via corporate envelopes will now be liable to stamp duty at 15%.
Otherwise, not a huge amount to report, and in conclusion, no Budget ever delivers on all fronts to all industries. There is also the fact, of course, of an impending election in 2015 – so the chancellor may well be keeping a number of populist proposals close to his chest until next year.
In all, this year’s announcements seem to have been roundly well received by business leaders. Quoted in The Guardian’s economics blog, director general of the British Chambers of Commerce said: “Business wanted a Budget that was disciplined, focused, and geared toward the creation of wealth and jobs – and that’s what the Chancellor has delivered. Osborne’s focus on investment, exports, house-building and economic resilience passes the business test. As with any Budget, there were some populist measures that were not at the top of business’s wish list. Luckily, these were far outweighed by considered measures to support business growth and wealth creation. Many of these measures are excellent for now, and for the future. Yet the nurturing of a truly great economy requires more action than one Budget can deliver.”