Following this afternoon’s Budget, H&K’s head of Financial & Professional Services, Ben Curson, provides his initial thoughts on what today’s announcements will mean for businesses, big and small.
“Making things happen…not making things up”. So said George Osborne in a business friendly budget delivered from Parliament today. Well, we’ll see about that in the fullness of time but it seemed clear to me on first listening that the Chancellor was pitching particularly to small business and entrepreneurs. He proposed a range of tax simplification measures, tax breaks and additional enterprise zones to encourage starting and growing businesses. Should this initiate a surge in enterprise and economic growth, the Chancellor will have every reason to trumpet his success as a man doing everything he can (with very little room for giveaways) to stimulate the economy.
Not everyone will be pleased of course, especially not the banks. One can’t help but feel they will be slightly irritated by the fact the bank levy will be increased despite an understanding that their tax treatment would remain stable in return for increased lending to small business – 15% according to the Chancellor today and detailed on page 76 of the Budget docs.
The other big business losers in tax terms are the oil companies, who will pay a lot more in tax in order to fund the cut in fuel duty – perhaps the ‘rabbit out of the hat’ moment in today’s announcement, and something that it seems the Opposition weren’t really expecting judging by Ed Milliband’s immediate response.
What else? Personally, I’m very pleased to see an open acknowledgment that Britain has been dropping down the league in terms of competitiveness (4th to 12th according to the Chancellor), and that the Government is doing something to address educating and upskilling the workforce. There appear to be specific steps to make Britain a more viable, cost effective place to do business in an increasingly global marketplace to attract business from overseas, which as Britain comes to terms with its place in the new world order is absolutely fundamental.
I do believe simplifying and incentivizing business rather than just cutting spending is the way that Britain will recover from the financial crisis of the last few years. I was enormously reassured therefore, as you would expect in my position, that there was a clear intent for the “City of London to stay a leader in financial services”. For their part, the markets have seemed largely unmoved by the Chancellor’s proposals, though bank shares have dropped slightly as you’d expect from the bank levy announcement
While the devil is always in the detail and many of our clients will be analyzing the budget book in-depth on behalf of their own business and their clients’, it seems the Chancellor made a very pro-business speech. Whether the consumer will feel as positive as they become increasingly squeezed by rising inflation and commodity prices will remain to be seen, especially in the forthcoming elections in May. I suspect not.