Budget 2008: Yorkshire reaction

THE opposition parties have accused the Chancellor of delivering a “dire” budget with critics claiming it is a “green cop-out” but it has received a more moderate reaction in Yorkshire.

Leeds Chamber has accused the Chancellor of doing little to help businesses achieve the stability which the Government says is at the heart of this year's budget.

Policy director at Leeds Chamber of Commerce, Ian Williams said: “Whilst we welcome the Chancellors cautious budget and focus on economic stability, we see very few measures that will help businesses achieve this. Overall the Budgets economic forecasts remain unduly optimistic.

“In terms of actual commitment we welcome the fall in corporation tax from 30% to 28%, the simplification of taxes for smaller companies, the Capital gains tax for small firms to remain at 10% and a commitment of 30% of Government contacts for smaller businesses.

“In addition postponing the planned 2p rise in fuel duty to October will allow business to breathe a sigh of relief.

“Businesses and road users are being squeezed by higher fuel costs and the Government is getting an unexpected windfall due to higher duty receipts. There is no justification for a 2p rise in October.”

EEF, the manufacturers' organisation gave a mixed reaction to today's Budget statement, welcoming the measures announced as part of the Enterprise White Paper, but expressing disappointment at the lack of any announcement on the future direction of tax policy.

EEF chairman, Martin Temple, said: “The innovative package of measures designed to promote enterprise will tick many of the boxes for manufacturers and will go some way towards restoring the government's reputation in this area.

“We will however want to see clear evidence of delivery. But, the lack of any announcement on the future direction of business tax strategy failed to impress.

“The UK's tax competitiveness is heading in the wrong direction and this still needs to be addressed if other positive measures are not to be undermined.”

However, on measures to tackle Climate Change, EEF criticised the lack of any clear long term strategy to maximise business opportunities from a low carbon economy and change the behaviour of individuals.

The organisation especially criticised the absence of any increase in public funded research and development on climate change measures.

EEF Yorkshire chief executive Alan Rowlinson said: “His raft of measures includes nothing to help those many Yorkshire businesses who would like to capitalise on the opportunities to develop and supply the low-carbon goods and services that we will need to achieve his targeted reductions in carbon emissions.”

David Heaton, partner and head of employer consulting at accountants Baker Tilly in Leeds, said: “The fact that Capital Gains Tax is 18% is still going to annoy people and the entrepreneurs relief he has announced is not going to be enough to help a lot of people. For any sizeable business it will be no help at all. “

However he welcomed the fact that the Chancellor had raised the VAT threshold for correcting mistakes from £2,000 up to a maximum of £50,000 for larger businesses making it easier for firms to correct tax returns themselves without the taxman having to get involved.

Nimble Thompson, chairman of the Institute of Directors (IoD) in Yorkshire and the Humber, said: “On the face of it this seems to be a rather bland Budget designed to steady the ship rather than rock the boat. However, there appear to be a couple of positive measures designed to help certain areas of business, such as the capital fund to encourage female entrepreneurs, the simplification of tax calculations for small businesses or the £60m commitment to tackle skills shortages.

“The target that all new non-domestic buildings will become zero-carbon from 2019 is a big commitment to make and it has not been revealed how this will be funded. Can we expect future tax incentives for companies renting zero-carbon premises or are businesses expected to foot the bill for the Government's green agenda?

“As always, the detail hides the real picture and it will take time before we will be able to see if the Chancellor's measures are going to benefit businesses on the whole or whether there will be hidden complications down the line.”

Budget reaction from Helen Rana, policy and representation manager at the Sheffield Chamber of Commerce, can be heard by clicking the link http://www.thebusinessdesk.com/assets/_files/audio/mar_08/businessdesk__1205342439_Budget.mp3