Budget welcomed by business groups
THE Budget was broadly welcomed by major business groups and other organisations in the North West.
Coverage of the Budget is brought to readers of TheBusinessDesk.com in partnership with Ernst & Young.
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Ernst & Young Manchester-tax partner Martin Portnoy said that in a tough environment, with limited means at his disposal, George Osborne had “done what he could” to inject growth into the economy, and said the Help to Buy scheme would boost the property market and have a “significant multiplier effect”.
Darrell Matthews, regional director of the Institute of Directors in the North West “applauded” the Chancellor for sticking to his guns on deficit reduction and cutting corporation tax.
While his counterpart at the Confederation of British Industry, Damian Waters, welcomed the boost for the housing market and an increase in infrastructure spending.
The Forum of Private Business backed the Chancellor’s measures, particularly the £2,000 allowance on national Insurance contributions at small firms.
The IoD’s Darrell Matthews said: “This budget appears to help some of the North West’s key sectors – Shale Gas is a new industry and needs support, and the Construction sector will benefit from the mortgage announcements today. The more helpful tax regimes for employing people will also help growth, as will the recent Child Care announcements which will encourage female entrepreneurs. Overall, an aspirational budget.”
Damian Waters at the CBI said: “We’re particularly pleased our call for a focus on the short-term boost of housing has been heeded, alongside an increase in longer-term big ticket infrastructure spending.
“This was recognition it was a mistake to cut capital spending so sharply and that other growth-boosting measures were taking too long. But by shifting £6bn to housing and infrastructure, the government has sowed the seeds for growth and jobs.”
Dr Brian Sloan, chief economist at Greater Manchester Chamber of Commerce, said: “The first impressions of the Chancellor’s Budget are that it has been fairly positive for businesses. There were a number of investment incentives announced, particularly for the shale gas and aerospace industries, which should help businesses in those sectors here in the North West.
He added: “We were disappointed that the Chancellor didn’t outline further infrastructure investment from the £3bn of departmental savings and we are concerned that next month all businesses will feel the brunt of a rise in business rates – which have gone up by 13% in the last three years – with no obvious mention of any assistance with regard to this.”
Cliff Maylor, chief executive at North West Business Finance, which manages the £155m North West Fund, said: “The Chancellor’s promise of the lowest corporation tax in the Western world from 2015 is positive news for North West entrepreneurs. Cutting the tax to 20% will free up more cash for business owners to invest, stimulating growth.
“The new employment allowance will reduce the National Insurance bill for every company in the country. This should incentivise businesses to take on additional staff, allowing them to achieve their ambitious growth plans.”
Simon Bedford, partner and head of Deloitte Real Estate in the North said: “The Chancellor has found an extra £3bn per annum from departmental budgets to invest in infrastructure from 2015/16. While that is welcome, the challenge remains for the Government to translate this pledge into reality.
“Today’s commitment needs to be backed up by action and delivery. The fact remains that the construction sector has contracted in each month since October last year and new orders are down by nearly 40% from their peak in 2007. This is despite many announcements and initiatives that have not been able to arrest this decline.”
