Businesses react to Budget

by business editor Trevor Sturgess

Budget measures for small firms will be too late, according to John Longworth, director general of the British Chambers of Commerce (BCC).

While welcoming much for business in the Chancellor's speech, including scrapping the rise on fuel duty, and putting £3.5bn into helping buyers afford new homes, he said Mr Osborne should have done more to support enterprise and growth, such as scrapping damaging increases in business rates.

"We are at an unprecedented moment in economic history, and the government should be doing everything in its power to get the economy moving.

"Many of the Chancellor’s measures were targeted at larger corporates, and those that will benefit smaller companies will not take effect until 2015, which is too late. We need urgency, scale and delivery today."

Businesses would have wished he had been more radical in the pursuit of growth.

But Nick Paterno, managing partner of accounting firm McBrides, said the Budget would have minimal impact on Kent businesses.

He said the £2,000-a-year allowance offset against employers’ national insurance contributions from April 2014 was useful “but too little to directly encourage greater employment."

"The Chancellor had very little room for manoeuvre and the impact for businesses in Kent and the South East will be minimal," he added.

“In our view it’s very much a case of businesses ploughing on without any significant Government support, help or incentivisation until confidence returns to the economy."

Andy Golding, chief executive of OneSavingsBank and Kent Reliance, welcomed the attempt to stimulate the housing market.

“The extensions to the home buy scheme and the £130bn of mortgage guarantee, when combined with the Funding for Lending scheme which is already in operation, have the potential to make a significant difference to the housing market over the next few years,” he said.

But the Budget had done nothing for savers, apart from a tiny tax cut on interest.

“A bit less tax on savers’ interest in real terms generates very little economic impact, where as a functioning and competitive mortgage market has impact not just on people's ability to buy and move, but also the associated manufacturing and trade employment that goes hand in hand with a more buoyant market.”

Shepherd Neame chief executive Jonathan Neame toasted the 1p a pint cut in beer duty and scrapping the escalator after years of industry lobying.

The Faversham brewer has long argued that, given support, pubs and restaurants can create jobs faster than almost any other sector. “It is fantastic to see the government recognise the importance of British beer and pubs,” he said.

“By scrapping the beer duty escalator and then reducing beer duty by a penny a pint the Chancellor has provided a great boost for the sector.

"British beer was on course to become the most heavily taxed in Europe which, in turn, would have put an unsustainable burden on the country’s brewing and pub sector.

Shepherd Neame chief executive Jonathan Neame

“Today’s announcement is a clear statement that the government recognises the industry’s valuable contribution to both the economy and society at large.”

The Budget restores small business confidence and encourages growth and job creation, a delighted lobby group said.

Pleased that the Chancellor had adopted several of its recommendations, the Federation of Small Businesses in Kent and Medway urged members to seize the Chancellor’s wide ranging package of measures to support the economy.

It hailed the employer’s National Insurance allowance as a bold move, saying that small enterprises would not have to pay contributions (NICs) under £2,000.

Roger House, FSB Chairman for Kent and Medway, said: “Kent FSB asked the Chancellor and local MPs for a budget for small businesses and this is what has been delivered. This Budget opens the door for small firms to grow and create jobs.

“The Chancellor has pulled out all the stops with a wide-ranging package of measures to support small firms.”

"Until today it was looking likely that we might lose a whole generation of homeowners" – Alan Robinson

Alan Robinson of Robinson Michael & Jackson, which has nine outlets in Kent and Medway, said a £130 billiion underwriting package for the mortgage guarantee and New Buy schemes should “open the floodgates" for buyers currently priced out of the mortgage market.

“Until today it was looking likely that we might lose a whole generation of homeowners," he said.

"That would have been tragic as home ownership is such a cornerstone of our society.

"Suddenly there are more positives than negatives in the property market and this should encourage a new raft of buyers and sellers,”

He added: “We have been crying out for help from either the government or mortgage lenders and today the Chancellor has finally delivered some good news.

"As a company trading for over 50 years in the middle-to-lower end of the property market we have helped thousands of first-time buyers get a foot on the property ladder.

“However, the last five years have seen would-be homeowners thwarted by lenders looking for deposits in excess of 5% in order to secure the more affordable interest rates."

The New Buy scheme involves a new home buyer paying a 5% deposit, with a further 20% underwritten by the Government.

It applies to any new home up to £600,000.

Good for growth and jobs despite a few disappointments.

That’s how Nicholas Gabay, partner at law firm Thomson Snell & Passmore, with offices in Tunbridge Wells and Greenhithe, summed up the Budget.

He said that many cries for help from small businesses had been ignored, notably lower business rates, higher bank lending and more investment in high streets.

“Despite these reservations, we believe the measures are better for small and medium sized businesses than most probably hoped for, so we feel quite optimistic that they will encourage business growth and more jobs.”

Mr Gabay added: “We look forward to seeing how the proposal for capital gains relief on sales of businesses to employees will be implemented.

"The intention must be to resuscitate management buy-out opportunities, but without much evidence of banks increasing lending to facilitate buy-outs, it is questionable how realistic an incentive this relief will be for business owners or their employees."

20/03/13

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