Budget 2010: Reaction statement from Northamptonshire Chamber
Commenting on the Emergency Budget announced by Chancellor George Osborne today, Paul Griffiths, Chief Executive of Northamptonshire Chamber, said:
“This Budget was always going to be a tough one. The new Government needed to demonstrate that it could cut the deficit and put in place a plan for economic recovery.
“The Chancellor made some relatively bold moves in terms of opting for spending cuts over increasing current or implementing new taxes, with the exception of the VAT increase to 20%. Although the VAT increase will hit businesses and fuel prices, we feel that this is preferable compared to an increase in National Insurance Contributions and I am pleased that the Government has put off the increase to 4th January 2011 – exactly what we called for when the main rate rose earlier this year. A few days’ delay after New Year gives businesses time to adjust.”
“The Chancellor also mentioned a National Insurance relief for new businesses set up outside London, the south-east and east of England. Potentially this sounds like a good move for the economy and, hopefully, Northamptonshire will benefit from this, although we need clarity on the boundaries of the areas identified.”
Further comment from Paul Griffiths on specific policy decisions
ON DEFICIT REDUCTION:
“Businesses have been looking for a clear plan for deficit reduction for some time. They will welcome the balance that has been struck – with the lion’s share of fiscal consolidation coming from spending cuts rather than increased taxation.”
ON CORPORATION TAX:
“90% of the businesses surveyed this month by the British Chamber of Commerce were supportive of a reduction in the headline rate of corporation tax. It is particularly welcome that the small companies’ rate will be reduced to 20% from next year. The business community will also welcome the four-year plan to reduce the headline rate for large companies to 24% - as this will help make our tax system more competitive internationally.”
ON CAPITAL GAINS TAX:
“The Chamber opposed changes to the Capital Gains Tax system that penalised investors. However, we believe the Government has made some sensible compromises in its approach, such as the significant increase in Entrepreneurs’ Relief and the maintenance of capital gains tax allowances.
“The Chancellor has tried to steer a course between retaining simplicity and tackling avoidance, and he has appeared to have succeeded in this aim. The proposal to increase the capital gains rate from 18% to 28% for individuals seems a reasoned response. We will watch closely, however, to see if this change has an impact on investor confidence.”
ON NATIONAL INSURANCE CONTRIBUTIONS:
“The Chamber lobbied hard to roll back the rise in employers’ National Insurance planned for next year. While we are pleased that the Government has taken the sting out of the rise by raising payment thresholds, some employers across the country will still be worse off from April 2011. We would urge the Government to go further – and eliminate the whole of this unwelcome tax on jobs.”
ON CANCELLATION OF UNFAIR BUSINESS RATE BILLS:
“Chamber members doing business in the country’s port areas will celebrate the cancellation of unfair back-dated business rate bills. This is a major win for Chamber lobbying and will support our drive to grow our ports – in anticipation of increased international trade and exports in future.”
ON CAPITAL SPENDING:
“Chambers of Commerce have vocally supported continued investment in infrastructure – which underpins productivity and growth. While the UK still faces an important infrastructure deficit, we are very pleased that the Government is not further slashing capital spending, meaning that vital projects will be able to go ahead.
ON ACCESS TO FINANCE:
“Adding £200m to the Enterprise Finance Guarantee for the rest of this year will help a number of companies get the vital credit they need to grow. We will continue to work with the Government on a scheme to support business access to finance as we come out of this recession.”
ON THE COMPREHENSIVE SPENDING REVIEW:
“The decisions taken in October’s spending review will have long-lasting effects on UK plc. Business will continue to press for higher expenditure on export promotion and infrastructure.”
Posted by: Northamptonshire Chamber
