With General Elections looming and the Government doing everything it can to position itself in a strong position before the elections, the Budget didn’t seem to have a huge impact for industry and commerce. Some welcomed support will come to small businesses but overall it appears to be a very tentative Budget, with little being introduced to tackle the country’s deficit. A prediction of 3-3-5% in economic growth also seems very optimistic, but here is what some of the key Business Leaders have had to say………….
Michael Izza, chief executive of the Institute of Chartered Accountants in England and Wales:
“Whilst the focus on jobs and investment is important in the short term, businesses will want to know more about what they can expect in the medium to long term.
“They need greater clarity on how departmental spending is going to be cut and also if taxes are going to be raised. This will have a direct influence on their plans to invest and grow.”
Richard Lambert, director general of the Confederation of British Industry (CBI):
“With the election just weeks away, this was a clever, political budget. However, anxiety remains on how the deficit is going to be paid down, and the growth forecasts for 2011 and beyond are still on the optimistic side.”
“There was more support for business than might have been expected, with a series of modest but helpful changes.
“The doubling of entrepreneurs’ CGT (capital gains tax) relief will help investment in small businesses and the extra money for science places at university will be welcomed by industry.
“However, it is the fiscal decisions over the next 12 months that will really determine the UK’s economic future.”
John Hawksworth, head of macro-economics at PriceWaterhouseCoopers, on growth forecasts:
“As expected the Chancellor has largely stuck to his previous economic growth forecasts except for a small downward revision for 2011. His view that GDP growth will be 1-1.5% in 2010 looks reasonable.”
But his forecast that growth will then accelerate to around 3-3.5% in 2011 and 3.25-3.75% in 2012 continues to look relatively optimistic at a time when the economy will still be burdened by high levels of both household and public debt.”
So the sentiment seems to be “watch this space” and with caution. There still appears to be a lot of recovery necessary, and some may see this Budget as a political position piece rather than economic tool to enhance UK recovery.
We would welcome your views and the impact you see the 2010 Budget having on the economy.