The post-Budget analysis gathered pace today, with business organisations and interest groups commenting on what was included in Chancellor George Osborne’s statement and what was left out.
In a move welcomed by the Federation of Small Businesses (FSB), the chancellor announced an employer’s allowance which removes the first GBP2,000 off employers’ National Insurance contributions. In practice, this will mean that up to 450,000 small businesses will not have to pay National Insurance contributions from next year.
The FSB was also happy that the chancellor had decided to cancel the GBP0.03 rise in fuel duty which was due to take effect in September.
Further support for small firms was offered in the form of GBP30m which will be made available over two years to address a gap in the market for providing external business advice to small businesses, on matters such as making a successful loan application to a bank or taking on an employee.
For young people who want to start their own business, the government will provide GBP30m of additional funding for the Startup Loans scheme, which supports entrepreneurs aged 18 to 30. With the new funding, GBP42m will be available in 2013 to 2014 and GBP60m for 2014 to 2015.
The chancellor also announced plans to reduce the main rate of corporation tax to 20%, unifying the rate for small and large firms. This was welcomed by the Institute of Directors, whose head of taxation, Richard Baron, said that a rate of 20% will put the UK ahead of most of the OECD. Baron called on the chancellor to go further in future budgets. “A medium-term target of 15% would be ideal,” he said.
Among other business measures announced yesterday was a commitment to contribute GBP1bn, matched by industry, to fund an Aerospace Technology Institute (ATI) over the next seven years. The aim of the ATI is to allow industry and academic researchers to develop technology for the next generation of quieter, more energy efficient aircraft.
Elsewhere in the Budget speech, Osborne promised tax breaks to promote investment in shale gas and support the growth of a shale gas industry in the UK.
Among the issues not touched in the Budget were aviation, with the planned increase in Air Passenger Duty set to take effect on 1 April. Alluding to the cut in duty on beer, Dale Keller, chief executive of the Board of Airline Representatives in the UK, claimed that the chancellor had “put beer before aviation.”
Meanwhile, British Retail Consortium director general Helen Dickinson expressed disappointment that the Budget offered little direct help for high street businesses. She argued that freezing business rates would have made a real difference to high street retailers and their local communities.