West business figures welcomed some of George Osborne’s Budget measures but many thought much more should have been done to boost small firms, kick start the ailing property industry and increase confidence.
Business West managing director Phil Smith welcomed the fact that the Chancellor had not wavered from his Plan A as businesses relied on continuity – especially around low interest rates – to make decisions. The worst thing now was for the cost of borrowing to increase, he said.
But he added: “With economic recovery slower than expected, businesses are getting restless about the lack of real action and progress.
“The overall tone of this year’s Budget speech was a little different to the last one, not surprisingly as there was even less room for manoeuvre this time. With growth still faltering and few options for extra spend, delivering a fiscally neutral budget was a real challenge.”
“We welcome the proposed review of the Monetary Policy Committee’s (MPC) remit, scrapping the rise on fuel duty, further reduction in corporation tax, support for the British Business Bank and tax relief for the creative and animation industries, but we believe more could have been done to promote growth. Businesses across the country called for the scrapping of damaging increases in business rates, but our call was ignored by the chancellor once more with any action put off until the Autumn Statement. We will continue to ask the chancellor to take immediate action on business rates.
“The proposals for an employment allowance are particularly welcome and will help many small companies who will now pay no jobs tax. The move to re-direct money from government departments to infrastructure over the medium term is a step in the right direction. However, we would like to have seen a bigger shift in government direct spending on housing, roads, access to finance and export support.
“Whilst we welcome the demand side stimulation provided through the £3.5bn investment in shared equity loans to help get people onto the housing ladder and the mortgage guarantee, we would like to see more direct support for construction and housing. We’re still not building enough homes in the UK but the government has done little to unlock investment to enable this to happen. We need more action to free up publicly owned sites, stalled sites and to encourage the private sector to “get building”. Direct support for construction creates jobs and supply chain activity and boosts business confidence.”
He said perhaps the most important announcement in the Budget for the West actually came yesterday with the Government’s acceptance of the recommendations made by Lord Heseltine to create a ‘single pot’, devolving funding for housing, skills and transport.
“Whilst the detail has not yet been announced this is a major boost for our cities and for business, with spending devolved to the local area where it can focus on real local priorities,” he said. Business West runs the Bristol Chamber of Commerce as well as providing a range of business services.
Bristol Mayor George Ferguson said: “I welcome the Chancellor’s confirmation in today’s Budget that the Government will be accepting the majority of Lord Heseltine’s Review.
“The move to a single pot of funding for cities is essential and is something I have lobbied hard for with a range of ministers over recent months.
“Bristol and the other core cities are well placed to help drive growth and the devolving of funds is crucial to this.”
But Mayor Ferguson said he was deeply concerned at the increased burden being passed on to local authorities over and above what was already known and said he would be seeking a united response with leaders of the Core Cities group tomorrow when they meet in Newcastle.
Support for some of Bristol’s key sectors such as aerospace and creative industries were welcomed by Bristol & Bath Science Park chief executive Bonnie Dean, although she said the detail on how exactly this will manifest itself is yet to be seen.
“We are pleased to see support for research and development,” she said. “The decision to increase by fivefold the value of government procurement budget spend through the Small Business Research Initiative will give SMEs greater access to publicly fu
nded research and development (R&D) grants. The 10% increase in tax relief for companies undertaking R&D is also welcome.
“Measures announced to improve take-up of the Seed Enterprise Investment Scheme will also help to stimulate entrepreneurship as it offers tax relief to individuals who invest in start ups.
“The Chancellor said that he wants to show that the UK is open for business; whether these measures are enough to attract international innovation to the UK is still open to debate.”
West chartered accountancy firm Milsted Langdon, which has an office in Bristol, welcomed the measures in this year’s Budget aimed at helping smaller businesses, including the unexpected announcement to reduce National Insurance bills by £2,000 for every employer from April 2014.
Tax partner Rob Chedzoy said: “This year’s Budget included a number of measures which will be welcomed by business owners and families alike. However, as always, the devil is in the detail.”
