The Budget: The Business World’s verdict

The Federation of Small Businesses (FSB)

The FSB said the Budget “largely ignored the small businesses.”

“We welcome moves to focus on jobs and job creation for young people,
but we are very disappointed that this budget will do nothing for those
firms which are doing their best to hold on to their valued employees,”
said FSB national chairman John Wright.

“With a quarter of business failures due to late payment and around
£38,000 owed to small businesses at any one time, Companies House
should have been given more powers to name, shame and fine companies
which fail to pay on time.”

The FSB said it welcomed capital allowances for firms investing more
than £50,000 doubling to 40 per cent, and was pleased with the trade
credit insurance scheme. But, it said, the 2p fuel rise would also hurt
small businesses at their most vulnerable time.

The Forum of Private Business (FPB)

FPB chief executive Phil Orford said,
“While some of these measures will benefit low-carbon companies and new
technology start-ups, they will do little to restore business and
consumer confidence and stimulate economic activity.
 
“Although the long-term unemployed will benefit from investment in job
creation and training from 2010, nothing has been done to help
businesses retain their existing skilled workforce, which continues to
be decimated as a result of the recession.

“While welcoming changes to capital allowances and loss relief, the
reality is that these will have only provide limited benefit to smaller
businesses. In addition, restrictions to the new credit insurance
scheme and the failure to address business taxes remain considerable
barriers to business survival and growth.”

The Chamber of British Industry (CBI)

Richard Lambert, director-general of the CBI, said that the government had not set a credible path to restoring economic health.

“By pushing out the horizon for balancing the books as far as 2018
the Government is running too much of a risk,” he said. Although he
added, “On the fringes of this Budget, there are some worthwhile micro
measures, including support for businesses struggling to access trade
credit insurance, and for carmakers through a time-limited scrappage
scheme. The changes on investment allowances and the ability for firms
to carry forward losses are also welcome.”

The British Retail Consortium (BRC)

The BRC criticised the Budget for not helping retailers, and said financial forecasts were overly optimistic.

It said the chancellor’s plan for ‘top-up’ insurance was “too little too late”.

Jane Milne, BRC Business Director, said, “Matching the trade credit
insurance that private insurers are willing to provide is vital to
helping fundamentally sound businesses weather the recession. But the
unannounced detail confirms this safety net will be denied to companies
whose cover was cut before 1 April meaning the plight of many is being
ignored.”

The BRC said the option of postponing part of this April’s five per
cent annual increase in business rates was welcome, but not enough on
its own, pointing out the increases could destroy an extra 19,300 jobs,
kill off an additional 582 retail businesses and cost an additional
£1.6 billion.



It also criticised the reversal of the VAT reduction coming in December, the busiest time of the year for retailers.

EEF

Gilbert Toppin, chief executive of EEF, said,
“Manufacturers will also be disappointed that the Chancellor has hit
them with the double whammy of failing to provide support for short
time working whilst increasing the costs of redundancy.”

The British Chambers of Commerce (BCC)

The BRC expressed concern over the income tax hike (from 45% to 50% for those earning more than £150,000).

Its chief economist David Kern said the GDP growth forecast of –3.5% in
2009 is realistic, but the 1.25% economic growth forecast for 2010 and
“very rapid growth” forecasts for 2011 onwards were overly optimistic.

He said the borrowing forecast of £175bn for this year was realistic,
but the assumption the Budget deficit would halve in the next four
years isn’t going to happen.

“If the Chancellor’s growth forecasts prove indeed to be too
optimistic, there will be adverse consequences for the credibility of
his forecasts for the public finances.”

Kern added, “The outlook for unemployment is bleak, and we still expect
a peak of some 3.2 million next year. It is doubtful if the measures
announced today, however welcome, will alleviate significantly the
jobless situation.”

PricewaterhouseCoopers (PWC)

Mary Monfries, UK head of entrepreneurs and private companies and
private clients at PWC, said, “The 50% higher rate of income tax is
being introduced one year earlier (April 2010) than originally planned.
This is driving the nail further into the coffin as far as
attractiveness of the UK to internationally mobile businesses are
concerned.”

The British Beer and Pub Association (BBPA)

Finally, in response to the 2% rise in alcohol duty, the BBPA said the increase “signs the death warrant for thousands of Britain’s pubs and for tens of thousands of British jobs.”

This articles was previously featured on Smarta