The government’s move to revive the economy through increased investment and faster growth has drawn mixed criticism from the British business community.
The measures to increase hiring and increase investment were generally welcomed by business groups, but the lack of action to ease looming taxes and utility bills has left many disappointed.
Martin McTag, National President of the Federation of Small Businesses (FSB), said tens of thousands of small businesses and operators are feeling “cut” by the budget, arguing that they are “once again ignored and underestimated.”
There were also mixed reactions to Chancellor Jeremy Hunt’s plans to increase business investment with a new three-year stimulus that would allow companies to cover 100 percent of their capital expenditures from profits.
Shevon Haviland, CEO of the British Chamber of Commerce (BCC), said the plan, which is a less generous cut to the soon-expiring Super Deduction tax stimulus, was “a step in the right direction.” .
The government claims the ‘full cost’ scheme is equivalent to an average £9bn a year corporate tax cut over its three years of existence.
The Office of Budget Responsibility (OBR) said the change won’t ease all the pain for businesses because next month’s corporate tax hike will hit businesses with the heaviest burden since the levy was introduced in 1965.
The OBR estimates that the move will increase investment in the business by 3 percent per year. But Ms Haviland said “juries don’t know” how much it will help companies.
She added: “Nearly half of the businesses told us that from April they will find it difficult to pay their electricity bills and be unable to invest as they struggle to survive. There is little comfort for these companies.”
The Institute of Directors (IoD) welcomed the move but urged Mr. Hunt to make it permanent. Kitty Asher, former Labor MP and finance minister and now chief economist for the IoD, said: “Our economy has slowed in recent years because people who run businesses are nervous about investing when the climate is so uncertain.”
The Confederation of British Industry also supported. Matthew Fell, acting CEO of the CBI, called it “the second strong step in terms of Chancellor’s stability and growth.”
“The CBI has called for action on people and productivity, and the government has supported both. Measures to support households and businesses will provide the growth needed to improve living standards for all.”
Small business groups have openly criticized the lack of assistance for them. Mr. McTag predicted that his members would feel that the budget “helps households, but not small businesses.”
He said: “On the business tax, there is an additional £27bn to spend on big companies and he claims small businesses are already being catered for. This will lead to the feeling that you are being left behind rather than being treated as equal partners in economic recovery.
“Despite the fact that there are some positive words in the budget, the lack of government support for small businesses in critical areas is worrying. The Chancellor stressed that the UK is one of the best places to do business and that we will avoid a technical recession this year, but small businesses need more ambition and more attention. Action is what matters if we are to rebuild the 500,000 small businesses lost in the past two years.”
Helen Dickinson, CEO of the British Retail Consortium, warned ministers they must do more to help.
She criticized the failure to improve the tuition fee system to help employers better train their employees. “It is very important that the government allows companies to use their hard-earned tax funds for a wider range of training courses. Without spending a dime, Chancellor Merkel would increase investment in our workforce and help businesses prepare the UK economy with the skills they need,” she said.
The collapsed business tariff system continues to hinder business investment, job creation and economic growth. Bets must be paid in full, regardless of whether companies make profits or losses.
“This makes business ratings the final nail in the coffin of many underperforming businesses; Close stores, pay jobs, and prevent new stores from opening. The Chancellor must deliver on the Conservatives’ 2019 pledge to reform tariffs and develop a clear roadmap for future reforms.”
Budget 2023
What a budget really means for your money from childcare and pensions to tobacco and fuel.
budget announcements included promise of 30 hours of free child care for children older than 9 months, but phased out until September 2025. Also unexpectedly removed was the cap on the lifetime benefit for pension savings, the freezing of excises on beer in pubs and the increase in the tax on tobacco products, which increased the average price of a pack by 20. The cost of cigarettes was reduced from 10.65 to 11.80 pounds.
Chancellor pickpocket? Chief political commentator Paul Waugh says Hunt’s speech marked a return to his party’s practice of snatching the best ideas from critics left, right and center.
Don’t get fooled by Jeremy Hunt’s budget says columnist Jan Dant. The fine print hides disaster…
Source: I News
I am Moises Cosgrove and I work for a news website as an author. I specialize in the market section, writing stories about the latest developments in the world of finance and economics. My articles are read by people from all walks of life, from investors to analysts, to everyday citizens looking for insight into how news will affect their finances.