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A budget for growth?

After last week’s Budget announcement, we asked a number of our Board Members how they felt the Budget would influence business along the M3 corridor. Was this a budget to beat the recession and promote growth?

Geoff French – Chair, Enterprise M3

Like my colleagues who have commented below, I thought there were highs and lows in this year’s budget. The drop in Corporation Tax is most welcome affecting businesses across the board. The investment in super-fast broadband supports one of the principle targets of our team last year. The National Loan Guarantee scheme as well as the simplification of tax for small businesses will both help those micro businesses which are the life blood of our economy – hopefully helping many people with bright ideas to start their own enterprises.

Whilst we could have always hoped for more Government cash or tax incentives for businesses across our region, we are hopeful that Enterprise M3 will secure another £7 million for the Growing Places Fund, on top of the £14.7million already earmarked. This will help us unlock infrastructure to support growth. Our plans on how businesses can access this funding will  be announced in April.

As ever, Enterprise M3 welcomes feedback from businesses across our region. Please feel free to contact us at info@enterprisem3.org.uk. We would welcome your thoughts and are always looking for passionate people who have the time and business experience to grow the region.

Tim Colman – Federation of Small Business

I believe the small business reaction to the Budget is mixed. What the micro and small businesses, across Hampshire and Surrey wanted were long term measures to help instil confidence rather than a barrage of

micro measures that have limited impact on the ground. Actions such as cutting the burden of red tape, helping to get young people into employment and measures to improve access to finance are certainly welcome.

Similarly proposals to simplify the tax system for the country’s smallest companies are very positive. However, feedback from owners of small businesses indicates that continuing rises in the price of fuel are having a detrimental effect across the board.

With regard to Corporation Tax, the reduction towards a 22% rate from April 2014 is positive, but it of course only affects those businesses that are currently able to trade profitably.

Louise Punter – Chief Executive, Surrey Chambers of Commerce

The Chancellor’s budget could never have satisfied everyone. Whilst the accelerated reduction in Corporation Tax, as well as the continued commitment to deficit reduction, are both reasons for businesses to be cheerful, we are disappointed that action was not taken to prevent the coming ‘Great Business Rates Robbery’, nor the lack of action to boost investment and employment by SMEs in the real economy.

Next month companies will still be hit with a 5.6% rise in business rates. In addition, businesses face lower allowances for investment in new plant and machinery in most areas, and will see no further incentives to create employment, particularly for young people. Whilst the Chancellor has reduced the cost of borrowing for some businesses, the problem of accessing finance in the first place remains, and will become more acute as the economy begins to grow.

The evidence from good businesses trying to expand consistently shows that the UK planning system is a brake on growth and jobs. The Chancellor is right to tackle the complexity, cost and inconsistency of the planning system and must not retreat from his commitment to radically simplify the planning system when he publishes the new National Planning Policy Framework this week. Enterprise M3 is currently asking business for its view on regulation and planning so that we can lobby local and national players for change.

There were some very positive things in the budget including a reduction of 1% in Corporation tax, a reduction in the top rate income tax from 50p to 45p, and the fact that the deficit has been kept under control. However it would have been a great opportunity for George Osborne to demonstrate how key it is to encourage and support businesses by reducing the business rates increase of 5.6%. This recognition would have gone a long way to encourage confidence and plans for growth. The Youth Contract could have been extended to

further encourage employment of young people but a pilot offering school leavers a loan to start up a business rather than a loan to go to university sounded quite creative and something the Chamber and Enterprise M3 would love to support.

For a detailed summary from PWC, click here