Business Groups: Budget 2012 Doesn’t go Far Enough
Business groups have criticised Chancellor George Osborne’s “unashamedly pro-business” Budget 2012, saying the measures don’t go far enough to boost growth or help small businesses.
British Chambers of Commerce director general John Longworth said that the Chancellor’s commitments to contain the deficit and reduce corporation tax to 22% over the next three years would be “warmly welcomed” by many businesses.
He added that the Government’s announcements on reducing the 50p top tax rate to 45p from next year, as well as its plans for road investment and enterprise start-up loans for young people as being “steps in the right direction”.
However, most small firms would feel that the main thrust of the 2012 Budget would “overwhelmingly benefit” bigger companies, said Longworth.
Institute of Directors director general Simon Walker also questioned how far the 2012 Budget would shake up the economy’s long-term prospects. While he called the additional 1% cut in corporation tax a “bold move”, Walker said the Chancellor “had not done enough to free business from the burdens and barriers that are holding economic growth back”.
“Businesses dearly want the opportunity to invest, create and build, but George Osborne must go much further if he wants to fire up the engines of the economy,” added Walker.
Confederation of British Industry director general John Cridland agreed, admitting that for smaller businesses, “things may not feel very different on the ground” following the Chancellor’s speech.
However, John Walker, national chairman of the Federation of Small Businesses, was more optimistic, highlighting the Government’s plans for tax simplification for firms with a turnover up to the VAT threshold of £77,000 as being particularly beneficial.
“Plans to move to a simpler ‘cash accounts’ system will bring huge deregulatory benefits to small businesses by making it easier for them to complete tax returns,” he said.
Alan Woods, Director of Liverpool-based accountants Woods Squared, said he was disappointed in the 2012 Budget, saying there was little on offer for small firms.
“The cut in corporation tax is good news for bigger companies turning over more than £300,000 or so, but it’s not going to do much for small businesses,” he said.
Steve Waller, managing director of Kent-based building firm Waller Associates Ltd, agreed.
“For the average business the reduction is a nice touch, but it’s not going to change things, by making it easier to grow, for instance, or start exporting globally,” he said.
The Government’s overhaul of planning regulations might be good for some construction firms, he added, but “most amendments concern sustainable housing, not general building work. In reality, it won’t do much for us”