Chancellor Philip Hammond’s support for the tech sector – a vital part of Bristol’s economy – and his commitment to devolve more funding for infrastructure and skills to the West of England in Wednesday’s Budget have been welcomed by business figures across the city.
However, there was criticism that his measures lacked the dynamism and vision needed to prepare the UK for Brexit. 
Institute of Directors South West chair Nick Sturge, pictured, said: “We need to build on the strong network of clusters that are already working well in the regions, accelerating growing businesses by helping them to access a broader talent and mentor pool, markets and investment.
“Similarly, the Transforming Cities Fund seriously recognises the importance of local leadership, which we believe is key.”
Connectivity was also key, said Mr Sturge, who is also director of Bristol’s Engine Shed innovation hub. “With a growing number of micro businesses operating from a home base, we wanted to see rural focused reincarnation of the connection vouchers scheme that made grants of up to £3,000 to help smaller business get superfast broadband installed.
“This ended in 2015. Whether it will be reintroduced as part of the £500m tech investment announced today also remains to be seen, but it’s well overdue to be brought out of the long grass.”
The doubling of investment relief in Enterprise Investment Schemes (EIS) would benefit knowledge-intensive enterprises and, along with Seed Enterprise Investment Schemes (SEIS), had already allowed many small companies to progress significantly faster than they would have otherwise.
James Durie, chief executive of Bristol Chamber of Commerce & Initiative at Business West, pictured, said: “Phillip Hammond confidently declared that his government is ‘delivering for every region in Britain’. 
“With Bristol facing big growth challenges, businesses are hoping that this emphasis creates real benefits for the West – in a Budget speech where other cities grabbed much of the limelight.
“Bristol gained from some welcome additional spending announcements to help deliver against its pressing transport, housing, skills and infrastructure needs.
“The West of England’s decision to opt for an elected Metro Mayor had some payback this afternoon – with a new £1.7bn Transforming Cities Fund – half of which will go to Metro Mayor areas, producing £80m for the West of England, enabling further investment in our local transport priorities.”
Accountancy group KPMG’s senior partner in Bristol, Andrew Hodgson, pictured, said the Budget had recognised the urgent need for improvements in regional infrastructure.
“Business leaders in Bristol and the South West will welcome Mr Hammond’s promise of a £1.7bn Transforming Cities Fund to get the economy firing in the regions by boosting infrastructure. 
“With clear evidence that our infrastructure if stifling productivity and growth, the power to transform the region now lies in the hands of the Metro Mayor.”
This welcome news was further boosted by the investment in Welsh rail which would improve journey times between Swansea, Cardiff and South Wales and Bristol and London, he said.
The Chancellor’s announcement that he is doubling the EIS allowance was also a positive step in helping early-stage businesses attract investment and raise finance.
“Not only will this help to boost investment in start-ups, but it potentially plugs a funding gap if the European Investment Fund is no longer available when the UK leaves the EU,” he said.
And while there were measures to improve competitiveness and innovation and a commitment to continue with a competitive corporate tax environment – things business crave – the sharp reduction in economic growth forecasts threatened to overshadow them, Mr Hodgson added.
At regional accountancy firm Bishop Fleming, which has its largest office in Bristol, head of tax Andrew Browne, pictured, said the “embattled and isolated” Chancellor had been under pressure to be bold and imaginative in his first Budget since the General Election. 
However, it was not the transformative event that was needed for the UK economy, he said.
“Philip Hammond has yet to demonstrate the required dynamism and vision to create a progressive tax regime that is powerful enough to energise a post-Brexit economy into an entrepreneurial powerhouse and raise the standard of living.
“Whilst he is donning his hard hat and opening the public purse to drive forward the much-needed housebuilding programme and development of the UK’s infrastructure, it is well short of being bold enough.
“The abolition of stamp duty for first time buyers on the first £300,000 of houses worth up to £500,000 is very welcome, but does not solve the fundamental issue of the affordability of a deposit and mortgage.
“And although the Chancellor recognises the need for greater UK productivity, tax-geared investment incentives still need a bigger boost, as will the funds needed to ensure we have adequate social care for our ageing population.”
He said while the Chancellor again softened the impact of business rate increases, the much-needed root-and-branch reform of this regressive and archaic tax was still some way off.
And he also slammed the Budget for failing to tackle what he said were the real issues facing small businesses, such as rates reform, tax complexity and red tape.
Matt Watts, partner in business tax at accountancy Smith & Williamson, which has a large office in Bristol, questioned the Chancellor’s approach to R&D (research and development) tax credits.
A further £2.3bn in investment in R&D as well as an increase in the main R&D tax credit to 12% – from 11% – was included in the Budget.
“What about our SMEs and scale-ups?” asked Mr Watts. “The Chancellor has increased the research and development tax credit (RDEC) credit by 1% but has left the SME rate the same.
“Whilst the existing scheme for SMEs is still more valuable, limiting the increase to R&D tax credits for the large company scheme sends a mixed message to British businesses.
“The R&D tax credits is a popular relief which is promoting investment and creating jobs. Why should only big business benefit when it’s our smaller businesses we need to be supporting?”
But Sam Holliday, the Federation of Small Businesses’ (FSB) Gloucestershire & West of England development manager, pictured, said the SME community had received a lot of ‘positive news’ from the Budget. 
“As with every Budget, the devil is always in the detail, but I think it’s fair to say there are clearly some positive news announcements here which will help the local small business community,” he said.
The FSB was delighted that the Chancellor had listened to it and others and not tampered with the VAT threshold – as had been strongly rumoured.
“We are also pleased that he has agreed to revisit the ‘staircase tax’, which would have unfairly penalised businesses operating over more than a single floor,” he said.
“The business rates news was also good. The more regular revaluations should stop the often surprisingly high hike that has hit businesses every five years, and we also welcome the decision that business rates will be linked to the Consumer Price Index (RPI) rather than the Retail Price Index (RPI), which should save our businesses money potentially.
“Elsewhere, we are pleased to see support for our local pubs and service industries with no increases on alcohol prices and, of course, all businesses will welcome the lifting of potential rises in fuel duty.
“With some encouraging news as well about an increased role for small builders as part of the new housing programme and large investments in infrastructure and skills this would seem, on the surface, to be a Budget which represents a real step forward for small businesses.”
David Pester, managing partner at Bristol-headquartered national law firm TLT, said the Budget’s commitments to supporting investment in growing businesses, R&D, infrastructure and housing would resonate with Bristol businesses.
“Fast-growth businesses and those who invest in them in particular will breathe a small sigh of relief with no changes to EIS and VCT tax relief rates and no significant scaling back of those reliefs either, as was widely feared – an important confirmation for the region’s thriving entrepreneurial community,” he said.
“From an infrastructure perspective, while £80m of the government’s £1.7bn Transforming Cities Fund will come to the devolved authority here in the West, it will be how the region turns this into positive actions to continue building a sustainable and prosperous community that will determine its impact.
“As a region, we need to be ambitious and demonstrate to central government a track record of successful implementation of projects that bring tangible benefit for business and the wider community across the West.
“Housing is also clearly high on the government’s agenda with a package of measures announced to tackle the perceived barriers to getting houses built. But, this has been a challenge for successive governments, so it will be a ‘wait and see’ as to see whether this latest package of measures has the desired impact.”
But Joanne Boyle, partner in the Bristol office of transatlantic law firm Womble Bond Dickinson, believed there was little in the Budget to help employers, who will see wage bills rise from next April as a result of the increase in the national living wage to £7.83 per hour.
“The National Minimum Wage is due to increase as well. There was a hint that the Apprenticeship Levy may be more flexible in future; this is being kept under review by the government, so we will have to wait and see what they propose.”
The National Association of Cider Makers, which represents many of the West of England’s cider firms, was disappointed the Chancellor rejected its call for a 2p per pint reduction in duty, which it said would have helped bring the industry back into growth in the longer term from its recent slowdown.
It also said it would be looking at the details of the new duty band announced in the Budget to ensure that it did not “adversely impact the ongoing success of cider makers across the UK, whatever their size.”
The Chancellor said the new band – likely to be between 6.9% and 7.5% ABV – would be targeted at white cider.
