Budget 2010: Reaction to the Budget

Reactions to today’s Budget:

Margaret Wood, regional chairman for the Institute of Directors (IoD) in Yorkshire:

“The Chancellor’s GDP forecasts are too optimistic and there is still no sign of a credible deficit reduction plan, but we certainly welcome the specific measures to support small and medium-sized businesses.”

John Richardson, Head of Advice Policy at wealth advisors, Towry Law:

“With Alistair Darling forecasting a continuing fragile economy and the possibility of slipping back into recession it is essential that private investors understand the level of investment risk they are exposed to. Asset allocation across a wide range of diversified asset classes are key to controlling this risk. Investors should seek advice to check that their investment portfolios are in the right shape to face these challenging economic conditions.

“We welcome the increase in the annual ISA limit for everybody from £7,200 to £10,200 for 2010/11 and the continued commitment to increase this limit in line with inflation. However to really encourage the savings culture the limits need to rise more substantially and, in real terms, faster than in line with inflation. “

Matthew Bagley, associate director in Jones Lang LaSalle’s Residential Development & Investment team in Leeds:

“The extension to the stamp duty threshold is positive news for the UK housing market. This incentive will provide a much needed stimulus to the market at a time when first time buyers are struggling to raise deposit monies.

The underlying economic conditions, in conjunction with a predicted rise in unemployment, is likely to dampen price growth and the concern of rising interest rates later in the year will continue to weigh on the market. The extension to the stamp duty threshold should motivate and support other buyers looking to upscale through the market.”

Simon Healy, Head of Savings at Aldermore:

“The Chancellor’s decision to increase ISA limits in line with inflation is a welcome shift in government policy which recognises the difficulties millions of savers are experiencing in a low interest rate environment. ISAs are the cornerstone of many people’s savings plans and today’s announcement means they can continue to invest in ISAs safe in the knowledge that they will provide tax-free benefits for many years to come.”

The British Bankers Associations (BBA):

“This was a Budget with an eye on the ballot box.

“As the Chancellor knows, the UK’s banking sector still generates a sizeable proportion of what he has available to spend, and the banks are committed to continuing to do so. They are also committed to repaying the taxpayer support in full and have already paid more than £8bn.

“Revenue from banks will support many of the Chancellor’s initiatives – this shows clearly the value of the financial services industry to the UK.

“The banks welcome moves to sustain the economic recovery and restore confidence, particularly as they focus their efforts on supporting mortgage borrowers and small businesses.”

John Walker, National Chairman of the Federation of Small Businesses:

“This Budget has provided welcome news on helping to improve small businesses cash-flow but the increase in the NICs will be bad for job creation.

“Small firms are key to furthering economic recovery as the UK’s largest employer and we are concerned that through continuing plans to increase employee National Insurance Contributions (NICs) and not introducing a NICs holiday to firms employing less than 50 staff who take on more employees, it will increase pressure on struggling firms meaning they will not be able to take on additional staff. FSB and CEBR research shows that the one per cent increase would cost 57,000 jobs in the UK. It is a tax on jobs which will do nothing to aid economic growth.”

Richard Lambert, CBI Director-General:

“With the election just weeks away, this was a clever, political budget. However, anxiety remains on how the deficit is going to be paid down, and the growth forecasts for 2011 and beyond are still on the optimistic side.

“There was more support for business than might have been expected, with a series of modest but helpful changes. The doubling of entrepreneurs’ CGT relief will help investment in small businesses and the extra money for science places at university will be welcomed by industry.

“However, it is the fiscal decisions over the next 12 months that will really determine the UK’s economic future.”

Ian Williams, director of policy at Leeds, York and North Yorkshire Chamber of Commerce:

“Darling’s Budget delivered a mixed outcome for businesses. A small number of new policies were introduced to help SMEs, such as an increase in bank lending and support packages, as well as investment incentives and a cut in business rates. The Government must ensure that these new measures do not become embroiled with red tape and become a bureaucratic nightmare for businesses.

Iain Smith, policy and representation manager at Sheffield Chamber of Commerce:

“The Government appears to recognise its responsibilities towards helping businesses, such as the temporary cut in business rates which will see a tax reduction for thousands of small companies in our region.

“Access to finance is vital for future prosperity and we welcome the agreement with Lloyds and the Royal Bank of Scotland to provide £94 billion of investment to business, with at least half going to SMEs. There are also encouraging signs to help new start-ups through a £4 billion UK Finance for Growth body, the £35 million University Enterprise Fund, the doubling of the annual investment allowance and relief on capital gains for entrepreneurs, all of which will provide the necessary support for anyone setting up their own enterprise locally.”

Robert Brown, head of rating at Sanderson Weatherall Leeds:

“The Chancellor has announced plans to increase small business relief from October 2010. Under this scheme eligible ratepayers with a rateable value (RV) of less than £6,000 will pay no business rates for a year, and those with an RV between £6,000 and £12,000 eligible for the sliding scale of relief will see “significant” reductions in their rate demands for a year.

“As always the devil is in the detail. There are many business people who will consider that they run small businesses but will find due to the Government using a RV definition they do not qualify. This is particularly true of businesses in London and the South East.”

Richard Kendall, Policy Executive at Hull & Humber Chamber of Commerce:

“The Chancellor clearly recognised the need to put business at the heart of this Budget.

“Several of the individual measures, particularly on the annual investment allowance, business rates and bank lending, will be welcomed by businesses but the increase in National Insurance is a big downside that will make it harder for businesses to create jobs.”

Bradford Chamber President Harold Robinson:

“A cut in business rates, albeit for one year only, will help cushion some of our members at this time, and the increased relief on capital gains tax is good news too. Increasing the flow of credit is a response to the successful lobbying of the Chamber network. We would have liked to have seen a reversal of the planned rise in NICS next April as well as scrapping the increase in corporation tax but these were ambitious hopes, admittedly. “