BUDGET 2014: Bristol business reaction

March 19, 2014

Measures that will help Bristol’s recovery from recession in this week's Budget were welcomed by business leaders and professiona advisers in the city.

Business West, the organisation behind Bristol Chamber of Commerce and the Bristol Initiative, said the Chancellor had delivered on many items on its wish-list.

Executive directorJames Durie, pictured, who is also a board member of the West of England LEP, said: “Business wanted a Budget that was disciplined, focused, and geared towards the creation of wealth and jobs – and that’s what the Chancellor has delivered.

“With a huge confidence gap still separating employers from young job-seekers, we are very pleased to see the Chancellor heed our call to help firms take on and train tomorrow’s workforce. Overcoming that confidence gap means more investment in young people, more apprenticeships, and more jobs, which are critical with more than 661,000 16-to-24-year-olds economically inactive in the South West.

“Osborne’s focus on exports, investment, house-building and economic resilience passes the business test. By making a better business environment his top priority, the Chancellor has recognised that successful and confident companies are the key to transforming Britain’s growing economic recovery into one that is felt in homes and on high streets.

“As with any Budget, there were some populist measures that were not at the top of business’s wish list. Luckily, these were outweighed by measures to support business growth and wealth creation.

“Many of these measures bode well for now, and for the future. Yet the nurturing of a truly great economy requires more action than one Budget can deliver. At the upcoming General Election, all our political parties must commit to a long-term programme that transforms our infrastructure, a much stronger skills and education base, access to finance and support for growing companies, even more export support and a clear, consistent tax environment. Otherwise some of the Chancellor’s welcome moves might not have the desired effect in years to come.”

The EEF, the manufacturing industry organisation, said George Osborne “deserved a pat on the back” for addressing the needs of manufacturing.

South West director Phil Brownsord said: “Manufacturers in the South West should be delighted – the Chancellor said this would be a Budget for manufacturing and he has more than delivered on his word. The Government has sent a strong message that it clearly recognises the need to make the competitiveness of the UK a priority and this will benefit hard-working companies across our region as well as up and down the country.

“We made a strong case for the need to reduce the rising cost of energy faced by so many companies and the Chancellor has acted on that. Taken together with measures to boost investment, exports and skills, the Chancellor deserves a pat on the back. We have always said that to achieve a resilient recovery the Government must back manufacturing and we’ve seen that from this Budget.

“We now have some of the building blocks in place which will help rebalance the economy. But, as the Chancellor suggests, there’s still more work to be done. We now need to take steps which will lead to longer-term solutions beyond current spending and electoral cycles. This will finally give business the predictability and certainty to encourage the successive rounds of investment our economy needs.”

Bonnie Dean, chief executive at the Bristol & Bath Science Park, pictured, said: “The Chancellor made specific reference to science and technology and its importance in developing a world-leading economy, and the announcement of new doctoral training centres and a new big data institute is certainly an encouraging sign.

“There was some good news for the start-up and small business community too. The announcement that the Seed Enterprise Investment Scheme, which was set up to help finance start-ups, has been made permanent will continue to promote enterprise and encourage investment in small and early stage companies.

“And the extension to the R&D tax credits relief scheme for loss-making businesses is also welcome. There are many failures behind some of the most well-known innovations and the ability to try again if things don’t quite work is absolutely crucial.”

Paul Bray, pictured, a tax partner in the Bristol office of accountancy and investment management group Smith & Williamson, said the biggest boost for business was the doubling to £500,000 and extension of the effective 100% tax relief on plant and machinery expenditure, the Annual Investment Allowance, to December 31, 2015 and an increase in R&D repayable credit rates encouraging businesses to invest in the future.

On savings, he said the over-riding message seemed to be the benefits of saving ‘from the cradle to the grave’ from increases in Child Trust Fund and ISA limits, a reform and simplification of ISA investing and two new fixed rate savings bonds for the over 65s.

“The ability to draw on pension pots early is a clever one; it will generate more people paying, albeit lower, income tax on earlier drawdown and additional taxes when the monies are spent,” he said.

The Chancellor’s reforms to the savings market also got a thumbs-up.

Malcolm Emery, partner at law firm Thrings, which has an office in Bristol, was surprised the Chancellor did not provide a further economic stimulus by reducing the standard rate of VAT.

Mr Emery, pictured, a dual-qualified chartered tax adviser and solicitor, added: “While the ongoing commitment to reduce the rate of corporation tax is to be welcomed, the number of individuals caught in the 40% tax bracket has increased by 25% since 2010.

“This puts more pressure on individuals who operate as sole traders or via partnerships, and many people will argue Mr Osborne could have done more to minimise the tax burden on small and medium-sized businesses.

“Meanwhile, the pension reforms and the introduction of a single new ISA with its annual tax-free savings limit of £15,000 are a welcome surprise, and stand to offer business owners the opportunity to plan for the future in a tax-efficient way.”

Barclays community leader for Bristol, Swindon and Bath, Mark Hatcliffe, said: “Our customers will welcome the ISA changes announced in today’s Budget by the Chancellor. 

“Savings are an important part of personal financial planning and tax-free savings provide many with the opportunity to save efficiently for future key life events such as buying a home or going on holiday, as well as having money put aside for a rainy day.”

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