Industry leaders praised a Budget package of tax cuts and investment to boost business, with smaller companies in particular given help in the wake of the disruption caused by the coronavirus and the UK’s exit from the EU.
“This was a box office Budget,” said Jonathan Geldart, director-general of the Institute of Directors, who pointed to measures to cut costs and support loans to businesses.
“Given the circumstances, the chancellor had to be bold, and he came through for business today.”
The government committed to a range of measures designed to relieve pressure on smaller businesses.
These included £130m to extend the start-up loans programme, support for small and medium-sized enterprises through growth hubs and the abolition of business rates for small companies in the leisure, retail and hospitality sectors ahead of a wider review in the autumn.
Ministers will also give £2.2bn in grants to about 700,000 small businesses eligible for business rate relief.
“This has been a deliberately pro-small business first Budget for the chancellor. We hope it is the start of things to come,” said Mike Cherry, national chairman of the Federation of Small Businesses.
Other changes will mean that businesses will be able to employ four full-time employees on the national living wage without paying any employer national insurance contributions — a measure expected to benefit about 510,000 businesses.
“This was a huge Budget and it’s delightful to see small businesses back on the agenda in a positive way,” said Emma Jones, founder of small business network Enterprise Nation, who described it as a “pro-business Budget”.
But she added that there were still worries over “who will pay for this largesse . . . is this the so-called ‘Brexit war chest?’”
“If they get this right then we will certainly be in line to benefit as one of the main markets for our galvanised steel is infrastructure and utilities,” said Sophie Williams, financial director of Corbetts the Galvanizers, a 200-year-old metal fabricating company in based in Telford.
“It will give us the confidence to continue to invest in what is still a very volatile economic picture.”
There were also other measures designed to help businesses, regardless of size. The annual rate of capital allowances available for investments to construct new, or renovate old, non-residential structures and buildings will increase from 2 per cent to 3 per cent — at a cost to the government of about £1bn.
Rain Newton-Smith, chief economist of the CBI, the employers’ organisation, said businesses would be happy with the focus on innovation and infrastructure spending, although she hoped for further measures on skills training, including reforms around the apprenticeship levy. She also said there could have been more on efforts to move to a low-carbon economy.
While there was no mention of Brexit in the Budget, which will disappoint some in the freight industry concerned about the need to invest heavily in border infrastructure and training, the chancellor promised to increase lending for exporters through UK Export Finance. This provides insurance to exporters and guarantees to banks providing export finance.
Stephen Phipson, chief executive of Make UK, the manufacturers’ organisation, said the chancellor recognised “the need to turbocharge investment in long-term measures which will boost the productive potential of the economy and support green growth”.
Mr Geldart also welcomed the commitment to infrastructure, saying that “directors have long been crying out for transport and digital upgrades”, adding: “The question now is how we translate that money into real improvements for local economies.”
Some smaller business groups were disappointed the chancellor had cut entrepreneurs’ relief from £10m to £1m, meaning that business owners selling their business can only reduce the amount of capital gains tax paid by £100,000, although they welcomed the decision to not abolish the move altogether.
