The CBI welcomed many of the “encouraging” Budget measures which it said would help businesses “create jobs for the benefit of all”.
Director-general John Cridland said: “Stability and consistency are what businesses need to grow and prosper. This Budget sets the tone, providing a clear plan for fiscal health and growth.
“The brighter fiscal picture has allowed the Chancellor to recalibrate his deficit reduction plans. In the next Parliament this fiscal breathing space should be used to achieve intelligent reductions in public spending, together with much-needed infrastructure and innovation.
“With business investment a crucial driver of growth, the Chancellor has signalled his intention to continue the Annual Investment Allowance. We want it to be made permanent in the Autumn Statement at £250,000 - this will fire the UK’s economic kiln by spurring smaller firms to invest in plant and machinery.
“The reduction of the headline rate of Corporation Tax to 20% next month, is a meaningful step in making the UK the most competitive tax regime in the G20 and will help to attract investment.
“The oil and gas industry, which supports 450,000 UK jobs and is a major contributor to GDP, has been given a much-needed boost with the reduction to the supplementary charge and other incentives. This will help address concerns over job losses and investment freezes, but pressures remain due to low oil prices.
“Giving savers greater freedom over their pensions, including creating a secondary annuities market, boosts choice but after a period of flux what’s needed now is breathing space for the industry and consumers to get to grips with all the changes.”
The Institute of Directors described the Budget as “solid and responsible” but said it failed to help mid-sized businesses over the burden of National Insurance.
It said: “Few Chancellors would be able to resist the temptation to binge on a £22bn windfall from the sale of bank shares this close to an election. By using it to pay down our national debt George Osborne has shown commendable discipline.
“Whilst some may have expected more rabbits from the hat, today’s employment figures and the revised OBR growth forecasts prove there’s definitely something of the Duracell bunny to Britain’s economic recovery. This is a testament to this Government’s support for enterprise but, more importantly, it is evidence of the tenacity and resilience of UK businesses.
“However, mid-sized businesses in particular will be disappointed not to see further action on the burden of employers’ National Insurance Contributions. Furthermore, the uncertainty that now clings to the Annual Investment Allowance ought to have been dealt with by confirming that the existing allowance of £500,000 will not be reduced.”
However, the CIPD, the professional body for HR and people development, took issue with the lack of action on the UK’s productivity gap.
Its chief economist Mark Beatson said: “The Government is right to cheer the rise in employment, but there are still some big questions that they have failed to answer on productivity.
“It’s astonishing that productivity wasn’t referenced even once in the Chancellor’s speech, and yet this is the biggest challenge that the economy and businesses face now. We need to understand how we can make more of our people, our assets and our infrastructure in order to boost business performance.
“We saw announcements in the Budget designed to encourage investment, but we saw little which will make a real difference to how UK employers develop workforce skills or use existing workforce skills effectively. There still isn’t a clear, coherent plan for productivity and, once again, skills are falling through the cracks. Unless we address the UK’s skills challenges, any short-term gains in the economy will be dashed by productivity shortfalls in the long-term.”
