As I write this, just minutes after the furore of the chancellor’s speech, commentators appear to be raving about a Budget for business. As an entrepreneur and small business champion that lives and breathes business life, I have to admit to mixed feelings.
George Osborne wanted to level with the British people and dire economic growth forecasts. There is no way to get around the chill wind of economic turbulence that continues to blow across from the Continent – and could well continue to freeze business confidence for some time to come.
So, to be fair to the chancellor, he didn’t have much to play with as he was caught in an economic strait jacket that is enough to make sane men cry – whether or not you believe it was this government or the last one that was culpable.
Given this predicament, a £2,000 National Insurance allowance for small businesses is great news. It could make all the difference for that extra hire or two needed by micro-enterprises. However, it is a drop in the ocean when it comes to combating chronic youth unemployment and discussing further initiatives could have really made an impact. But give credit where credit is due to the chancellor.
Talking of credit, lending to small firms has been a bug-bear for many years. The much trumpeted Funding For Lending scheme has, so far, hit a flat note and the idea of a Business Bank has been a mere pipe dream. The chancellor did, however, mention both in his speech. If these ideas can be firmed up, implemented, executed well and have a bit of teeth behind them, then most of the wailing and gnashing from entrepreneurs can be prevented. Capital remains the biggest barrier to that all-important and elusive growth.
The future cut in corporation tax to 20p for larger companies is also enough to warm the hearts of businessmen and women up and down the country. But all it does is bring the larger company rate in line with the 20 per cent smaller companies pay. Millions of small, struggling businesses get no cut, which was an opportunity missed.
Scrapping the 3p fuel duty rise in September was clearly the right thing to do – and has been for some time, given the anaemic recovery. It is a shame he didn’t have room to manoeuvre a cut to push the accelerator on growth.
Major incentives to boost the housing and construction industries have got to be good news given the chronic shortage of new houses. An extra £15bn for new public roads, rails and construction projects is also welcome, but given this is spread over the years toward 2020, spending more, sooner, would have made more economic sense.
Then there were a raft of enterprising measures. Regional enterprise investment, encouraging apprentices, tax cuts for investment in growth companies on the AIM junior market and for social enterprises – that are working to help the Big Society in a big way – are sensible and sound.
But at first glance, I couldn’t see any help for Britain’s beleaguered high streets. Business rates continue to rise while shops and jobs continue to be lost. High streets are going to be low on new tenants and brands unless there is a fundamental shift in attitude and support.
So, if I was to draw up a small business Budget report card, I would have to say:
- B for effort;
- C for concrete and timely action; and
- Fail for economic growth and recovery.
In other words, a step in the right direction for businesses. The “white rabbit” of the £2,000 National Insurance cut that George managed to pull out of the hat was a magic touch. But, overall, nowhere near the triple A rating that George, and businesses, crave.
The chancellor said he wants to help those who want to get on. Small businesses were provided with some useful small gains, but the reality is that without capital, confidence and a fair economic headwind, many entrepreneurs wanting to get on will just have to get on with it themselves. It was always thus.
Andy Yates is an entrepreneur and director of Huddlebuy.co.uk, Europe’s largest business money saving site. He looks at key themes and trends that every business needs to think about in a regular series for Real Business readers.
Share this story