The Budget: reactions from the business community

David Frost, director general of the British Chambers of Commerce (BCC):

"After two years of economic downturn, the Chancellor has clearly recognised the need to place business at the heart of this Budget. Doubling the annual investment allowance, help with business rates, and allowing entrepreneurs to keep more of their gains will prove especially popular.

"The Chancellor could have done more to set out a clear plan for the reduction of the budget deficit, which continues to threaten business confidence and investment."

The Federation of Small Businesses (FSB):

  • Disappointed and concerned that the Chancellor is proceeding with the proposed hike in National Insurance Contributions (NICs), asserting this comes at a cost of 57,000 jobs to the economy
  • Pleased with the announcement to take 345,000 small businesses in England out of the business rates system, saying business rates are the third highest outlay for small businesses
  • Looks forward to the introduction of the new credit adjudicator for rejected bank loan applications
  • Remains concerned at the 1p per litre increase in fuel duty next month, although says the proposal to phase in the increase will be of some help
  • Happy about the announcement to direct more public sector contracts towards SMEs and thinks it will particularly help businesses employing less than 10 people
  • Welcomes the extended time period for paying tax bills and the doubling of the Entrepreneurs Relief

Phil Orford, chief executive of the Forum of Private Business:

"There's a sense that this was a budget for an election and that the Government is courting the small business vote. It would have been more encouraging to see some real political responsibility and measures to address difficult issues, like public sector pensions, which we need to tackle in order to keep the UK competitive in the longer term.

"My initial reaction is that there was quite a bit of give, give, give in the Budget, but nothing new - and nothing to address the serious issues this country faces. I cautiously welcome the way the Chancellor acknowledged the importance of smaller businesses to economic recovery."

Richard Lambert, director-general of the Confederation of British Industry (CBI):

"With the election just weeks away, this was a clever, political budget. However, anxiety remains on how the deficit is going to be paid down, and the growth forecasts for 2011 and beyond are still on the optimistic side.

"There was more support for business than might have been expected, with a series of modest but helpful changes. The doubling of entrepreneurs' CGT relief will help investment in small businesses and the extra money for science places at university will be welcomed by industry.

"However, it is the big fiscal decisions over the next 12 months that will really determine the UK's economic future."

Christian Arno, entrepreneur and founder of Lingo24:

"The move on business rates, relief on capital gains tax and a doubling of the annual investment allowance are small measures, but added together, they make the entrepreneurial game a more attractive one. The country absolutely needs entrepreneurs to be firing on all cylinders and convinced this is the place to do business, and that they'll be rewarded and supported here. The additional support - from the Growth Capital fund to the commitment to award 15% of government contracts to UK SMEs - are also very helpful.

"All this said, we think this country will not start motoring economically (at least not sustainably) until we as a nation are much more export-focused, like successful modern economies like Sweden and Switzerland. We would like to see the government focus more support on helping companies take advantage of the foreign language internet - the fact it's much easier to market in foreign languages than English - particularly in this period of a weak pound. [...]

"We would also like to see incentives for business to help young people - those at school or university - to monetise the superior internet understanding they have. This will be crucial as the web's role in business becomes ever more critical."

David Bywater, tax partner at KPMG:

"The amount of time that the Chancellor's speech spent addressing the issues facing SMEs demonstrates that he does recognize the value that they have to UK economy and that after two years of tough economic condition and with income dead, access to cash remains a priority.  The main bank lenders into the SME sector (RBS and Lloyds) have been mandated to lend at least £47bn to struggling small businesses which is great news and the Chancellor also signalled that he is encouraging competition to the small lending sector with the introduction of new banks; offering a further life line to SMEs. [...]

"The Chancellor could have gone further and relaxed the rules to deliver entrepreneurs' relief to angel investors.  The relaxations to the VCT and EIS schemes will make it easier for certain businesses to raise equity capital, and these measures are welcome.

"Whilst the Chancellor did spend time talking about the Government's commitment to encouraging more jobs in the SME sector, his failure to address the National Insurance Contribution increase from April 2011 remains a very direct tax on employment."

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