Budget 2013: Business leaders give guarded welcome to ‘mixed bag’ Budget
- Credit: Archant
BUSINESS groups in Suffolk and Essex today welcomed Chancellor George Osborne’s plans to ease the burden of National Insurance and Corporation Tax in a bid to boost growth and employment.
The cancellation of September’s planned increase in road fuel duties was also praised, as was a new package of support for home-buyers.
But there was frustration in some quarters that a £3billion boost to major infrastructure project will not start to take effect for another two years.
The Chancellor announced an Employment Allowance, taking £2,000 off the National Insurance bill of every company in the country from April 2014, meaning that around 450,000 small firms – one third of all employers – will pay no employer NI contributions
Mr Osborne also revealed that Corporation Tax will be reduced by a further 1% to 20% from April 2015, unifying the small company and main rates at 20p in the pound.
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Peter Funnell, president of Suffolk Chamber of Commerce, said: “Business across Suffolk will see the Budget as a mixed bag.
“The Employment Allowance, reduction of Corporation Tax and the cancelling of the fuel duty rise in September is welcome and is the right thing to do.
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“We also welcome the very much needed £3billion for infrastructure projects which is needed in the East of England.
“It is frustrating though that again this looks at this early stage like further jam tomorrow. Infrastructure projects need to start now and waiting until 2015 at the earliest is just not soon enough,” said Dr Funnell.
David Burch, director of policy at Essex Chambers of Commerce, said the Employment Allowance was particularly welcome.
“Anything which reduces the tax burden on businesses and encourages employers to take on new staff has to be welcome,” he said. “This is something businesses have been calling for for some time.”
The cut in Corporation Tax was also a positive move as, with the economy “flat-lining”, it was important for the Government to stimulate growth.
However, Mr Burch echoed the disappointment that plans for further investment in infrastructure projects would not take effect immediately.
“Infrastructure investment is welcome but we believe it should be happening now, rather than be delayed until perhaps after the next General Election,” he added.
However, Chris Soule, Suffolk branch chairman for the Federation of Small Businesses (FSB), saw more positives in the Chancellor’s statement. “The FSB asked for a Budget for small businesses and this is what has been delivered,” he said.. “This Budget opens the door for small firms to grow and create jobs.
“The Chancellor has pulled out all the stops with a wide-ranging package of measures to support small firms. FSB says the housing initiative will help reinvigorate the construction sector in which many of our members operate and where confidence has been low.
“The National Insurance cut goes beyond what we were asking for and we are pleased to see the 3p fuel duty rise due in September completely scrapped. We now look forward to hearing details on how the Government intends to take forward the Business Bank that will help provide much needed access to capital for small firms.”
Luke Morris, chairman of the Suffolk branch of the Institute of Directors, said: “The move to harmonise Corporation Tax at 20% will please larger businesses and is part of George Osborne’s plan to make our tax regime internationally competitive. This is vital to the success of some of our region’s fastest-growing industries. The new Employment Allowances around National Insurance are particularly good for smaller firms. The private sector has done a huge amount to improve the employment figures, and it is right that they are rewarded.
“He’s also right to hold firm on his orderly deficit-reduction policy. Events only this week in Cyprus again prove that it’s an absolute necessity.”
Richard Tunnicliffe, eastern regional director for the CBI, 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.
“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,” said Mr Tunnicliffe.
“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.”
And he added: “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.”
Andy Wood, chairman of the New Anglia Local Enterprise Partnership, said: “Small businesses across the two counties will benefit from the £2,000 reduction in National Insurance contributions. We also welcome the decrease in Corporation Tax, to 20%.
“We’re pleased that the Chancellor has endorsed Lord Heseltine’s plans for a single Local Growth Fund and plans to invest in key sectors such as agri-tech through the Industrial Strategy.”
“The agriculture and logistics sectors in particular will benefit from the scrapping of the planned fuel duty rise. In a largely rural area where the cost of simply getting to work has increased dramatically in recent years this, at least, stabilises the cost of employees getting to work.
“We also welcome the promise of £3bn for infrastructure projects. Effective road, and rail networks, as well as fast broadband are vital to the efficiency of companies. New Anglia will work hard with partners in Norfolk and Suffolk to secure infrastructure funding for the two counties to benefit those who live, work and do business here.”