Peter Ames, director of strategy at Office Genie, said:
Building more roads, investing in skills to get the right people in right jobs and introducing an apprenticeship levy on large firms are all a start. But the devil will be in the detail, which well hear more about this Friday.
The chancellor is right to say productivity is a huge economic challenge. Its something thats been puzzling economists for many years.
Our economy is growing faster than any other advanced economy yet were not producing more. Earnings may be growing at their fastest rate for nine years and more people may be in work than ever before, yet we lag behind other G7 countries like France, America and Japan in terms of productivity.
The issue is it’s easier to boost productivity in manufacturing such as the car industry. But the UK is dependent on services like banking and the legal profession. And it’s very hard to measure or even increase productivity of say, a hairdresser. How do you cut hair faster or cut more hair with fewer people
If we want business profits and in turn wages to continue to rise then we need to be more productive.
Duncan Cheatle, founder of the Supper Club, said:
Business should be happy with this Budget. Clearly some won’t be pleased with the increase in minimum wage but on balance Im supportive of these announcements, particularly, reduced corporation tax and improvement to the National Insurance allowance, the latter of which could encourage the almost five million micro businesses in the UK to take the step to take on their first, or more member of staff.
“On dividends, I will be interested to see how this will work in practice as many small business owners will be impacted by the tax increases. On balance, the abolition of non-dom status is a smart move and it shouldnt deter wealthy foreign entrepreneurs. The UK is still an attractive place to start and grow a business.
Read more from our summer Budget commentary:
- George Osborne says tax dodgers have nowhere to hide
- George Osborne adds more detail to Northern Powerhouse plans
- Compulsory national living wage gets mixed reception
- George Osborne permanently fixes Annual Investment Allowance at 200,000
- Cut in corporation tax welcomed by British businesses
- Apprenticeship levy so firms get back more than they put in
- Roads Fund introduced as part of the plan to boost productivity
Bobby Lane, partner Shelley Stock Hutter, said:
“There is still no further detail on any changes to the business rates system and how this is going to be changed to help SMEs. A review was announced but there is still no detail.
“SMEs have also benefitted hugely from some of the recently introduced government schemes such as SEIS. Many of our clients would have welcomed an increase in the limit on SEIS from 150,000 to increase the ability to attract investment.
“Finally there are still issues around raising finance for many startups and new businesses. The British Business Bank was introduced to deal with this but it remains an organisation cloaked in mysticism that most business owners do not recognise as adding any value. More information and education is required.”
Sam Bowman, deputy director of the Adam Smith Institute, said:
“The new National Living Wage is a disaster that will condemn tens of thousands of people to long-term unemployment. Almost all of the most methodologically-robust, academic studies indicate that increases in the minimum wage kill jobs. Low-skilled people, young people and ethnic minorities are the ones who are hit worst.
“There is also evidence to suggest that higher minimum wages slow down the creation of new jobs, particularly in sectors that employ large numbers of low-skilled workers. Firms may also respond to this by cutting back on non-monetary worker compensation like break times and sick leave, to offset their increased labour costs.
“Britains experience with the minimum wage has been benign so far because the Low Pay Commissions remit has always been to minimise job losses. It has done this admirably, restraining hikes like this. This can no longer be the case.”
Sue Goble, CEO of KashFlow, said:
Many small businesses throughout the UK struggle to compete with the online goliaths and often restrictive Sunday trading hours continue to put SMEs on the back foot. Change has been long overdue and we fully support the move to even the playing field for the small businesses which should be the growth engine of the UK economy.
Research has shown just two extra working hours on a Sunday could create almost 3,000 jobs in London alone, so the potential for growth is clear if rolled out across the country. It is however vital businesses dont feel they are being taken advantage of and technology has a huge roll to play in ensuring such changes are a success. Additional working hours could increase the burden of admin for small businesses, leaving owners unable to focus on expanding their company. However, if technology is utilised to automate time-consuming tasks such as payroll management, this change may offer the perfect opportunity for SMEs to realise their true potential.
Andrew Hull, strategy director at Pocket App, said:
Rates need a complete overall as this cost has become one of the major hold backs to expanding into larger offices in London.
“Companies that invest in new tech like mobile should be able to offset the entire cost against tax. It was a disaster getting rid of taper relief. Needs to be brought back.
“Tax credits should be abolished and the money saved used to abolish national insurance. That would reduce the cost of employing people and mean that companies could pay more directly to employees. Zero tax zones in places like Northern Ireland should be introduced.
Peter Burgess, director at Retail Human Resources, said:
It is archaic that large shops still have to close for much of the day on Sunday which is one of the most important shopping days of the week. People do not have to shop on Sundays if they dont want to; no hands are being forced here. By increasing the time allowed for large shops to open this will reduce pressure on Saturdays and will, in turn, create more jobs.
It should be up to local communities to decide, as has been suggested. As for convenience stores, they retain their advantage of being convenient as opposed to out of town or in a major shopping area where it is quite often difficult to park. Given the massive swing away from large supermarkets to the high street, I would have thought they have already had the help they claim they need.