George Osborne took a bit of a bashing in the despatch box today. Voice failing, shouted down by the Opposition, and nicknamed the 'downgraded Chancellor' (the hashtag trended at number two on Twitter for a while), he laid out his vision for the UK's economic future.
Fuel duty rises have been scrapped, still no capital gains tax to pay on the Seed Enterprise Investment Scheme, corporation tax is being reduced to 20%, the most competitive rate in the world, and a one-off annual £2,000 tax holiday on national insurance contributions for every business in the land. And let's not forget the 1p reduction in beer duty. But what do business leaders and financial experts make of the Budget? Here are a few of the highlights.
On Osborne's help for SMEs:
John Walker, national chairman of the Federation of Small Businesses
'The FSB asked for a budget for small businesses and this is what has been delivered. FSB says the housing initiative will help reinvigorate the construction sector in which many of our members operate and where confidence has been low. The National Insurance Contributions (NICs) cut goes beyond what we were asking for and we are pleased to see the 3p fuel duty rise due in September completely scrapped. We now look forward to hearing details on how the Government intends to take forward the Business Bank that will help provide much needed access to capital for small firms.'
Charlie Mullins, founder of Pimlico Plumbers
'I don't think there was anyone watching the Chancellor's budget today, no matter what their political colours, who thought there was going to be a bonanza of giveaways delivered. But the Chancellor said this was going to be a budget for people who wanted to work, and this measure showed those weren't just empty words. Add to that cuts in the fuel tax increase, due to hit the pumps in the Autumn, and the tax relief in the form of a £2,000 exemption on National Insurance for all 450,000 companies in this country, and the increase in the Personal tax Allowance to £10,000 - a year ahead of schedule, and all of a sudden it is clear - there is a giant carrot being held out, and it's there for anyone prepared to work to get hold of it.'
On access to finance:
Xenios Thrasyvoulou, founder of online freelancer marketplace PeoplePerHour
'The Chancellor said at the start of his speech that this would be a Budget for people who aspire to start their own businesses. Does the Chancellor have a short memory? Apart from a £2,000 cut in employers NIC and corporation tax being cut again to 20% in 2015, there wasn't much else to give aspiring small business owners any confidence that the government has their best interests at heart.
'For starters, how is the government going to tackle the problems with the stuttering Funding for Lending Scheme, and what plans does it have for FLS beyond 2014? And there was no mention of extending money available through the StartUps Loan scheme to help people who are struggling to access finance to start a business.'
Paul Aitken, CEO and founder of personal asset lender Borro
'While we welcome the Government’s numerous promises to breathe life into the UKs business sector and support the nation’s entrepreneurs, we need to see it walk the walk– and not just talk the talk. There have already been moves made to stimulate business growth, through various initiatives over the past year, including the Funding for Lending initiative of course, but this is yet to have a truly positive effect. As a result, millions of small businesses still have no confidence in the banks and have turned to non-bank financing.'
On kickstarting the economy:
Brendan Flattery, CEO of Sage UK and Ireland
'With growth down and the borrowing up, the overriding message from the Chancellor is that it's still up to the private sector to drive the recovery. Thankfully, the Chancellor managed to pull some quite interesting rabbits out of the hat with specific pro-business measures. Infrastructure, innovation, enterprise and employment were the areas that businesses were looking out for, and continued investment in roads, rails and broadband and extensions to schemes to encourage private sector investment are welcome.'
Ian Stewart, chief economist at Deloitte
'The halving of the official growth forecast for this year left the Chancellor with a tough hand to play in today’s Budget. The official forecast for growth in 2013, at 0.6%, is even more pessimistic than the average economist. Weaker growth means that Mr Osborne will make even slower progress in his goal of eliminating the government deficit. The Treasury now forecasts that public borrowing will be £55 billion or 16% higher over the next five years. The Chancellor has given the incoming Governor of the Bank of England, Mark Carney, the green light to pursue more expansionary monetary policy. Mr Osborne’s statement that 'monetary activism' is at the heart of his strategy signals that the Chancellor is looking to the Bank to play a bigger role in getting growth going.'
Simon Cook, CEO of venture capital firm DFJ Esprit
We knew this was going to be a tough budget. With little money in the pot and pressure from all sides, Mr Osborne can’t get off the spend/cut treadmill just yet. We need to boost confidence in the UK and reduce debt (which grew by another £100,000 just yesterday). Growth remains the fundamental issue with the UK economy. We must support the small businesses in emerging industries (like tech) to help give us the boost we so very much need need.
On Osborne's property wheeze:
Jonathan Hopper, managing director of property search consultants Garrington
'Another day, another scheme intended to fire up the property market. While the devil of the mortgage guarantee scheme is clearly in the detail, and the implementation, if it works it could see lenders become far more active at higher LTVs. By removing, or at least significantly reducing risk, it will arguably make banks more likely to lend. But why wait until January 2014? Help is needed now and by January the mortgage and housing markets could have completely changed.
'It's a shame that the 'equity loan' part of the scheme is only available on new-builds. That's perhaps the biggest missed trick. Very few new-build homes are actually being built, and there is still restricted demand for this kind of property anyway, so it's difficult to see how this will have a material impact.'
On tax avoidance:
Francesca Lagerberg, head of tax at financial adviser Grant Thornton
There was no surprise that the speech was heavy on rhetoric against aggressive tax planning. The General Anti-Abuse Rule (GAAR) comes in to effect in July (after Royal Assent to the Finance Bill 2013) and will change the face of tax planning in the UK. The detailed guidance that will run alongside the legislation will be out in the middle of April. Of course, the GAAR is not intended to address issues raised by the debate over the tax paid by multi-nationals like Starbucks, Google and Amazon. The solution there is around the international tax treatment of items such as intellectual property and it will require organisations like the OECD and cross-country co-operation to provide rules fit for the modern digital world.
On the personal tax allowance increase to £10,000:
Chas Roy-Chowdhury, ACCA head of taxation
'The personal tax allowance increase, on the face of it, looks good, but it will only benefit the population who are currently 20% taxpayers, of which there are fewer and fewer. By dropping the threshold for the 40% income tax bracket, many hardworking people who will begin paying 40% for the first time will not just lose the benefits of the increased personal allowance they will actually need to pay additional tax on such things as savings and dividends because of the way the UK system taxes the top slice of income.'
On Osborne's 'banker bashing':
Michael Wistow, head of tax at City law firm Berwin Leighton Paisner LLP
'The Government is kicking the golden goose again with this spiteful and populist move against UK banks. Banks need to increase their capital to enable them to lend many multiples of it to kick-start the economy. Excluding banks from any corporation tax reduction through increasing the bank levy conflicts with the Government’s stated aim of encouraging banks to lend. We need to put an end to banker bashing via the tax code, which is often counter-productive.'
What do you make of today's Budget? Leave your comments below.