Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Budget should keep UK open for business

Peter Lucas

The Budget will take money from people’s pockets, but it could have been worse.

The Budget will take money from people’s pockets, but it could have been worse.

It was encouraging to hear the Chancellor on Tuesday declare more than once that the UK is “open for business”. Despite the well-trailed warnings of tough choices that had to be made, the coalition Government’s first Budget will probably be welcomed by most manufacturers and suppliers. It struck a reasonable balance, for example, in pledging to reduce the corporation tax rate from 28p to 24p during the next five years, which benefits profitable businesses, while lowering the allowances for capital expenditure available to manufacturers, which costs money for businesses wanting to expand or improve.

Continuing the Enterprise Guarantee Scheme and leaning on the banks to release some funds were also indications that George Osborne understands the issues that prevent ambitious firms growing or indeed operating efficiently. The UK Fashion and Textile Association’s (UKFT) campaign last year to raise the issue of credit insurance seems to have helped get this subject on the agenda.

We at UKFT also like the welcome incentives for small companies, such as a reduction in their tax rate and the Regional Growth Fund to provide finance for projects beyond London and the Southeast. Although there was no mention of the minimum wage, it may be difficult to increase it in the near future when virtually all the public sector has a two-year pay freeze on jobs over £21,000.

While the “unavoidable” rise in VAT to 20% came as no surprise, it was pleasing to see that the zero rating on kidswear was untouched. While having to change prices on Tuesday January 4 is not ideal for retailers, at least they have six months to prepare. The Budget will take money from many people’s pockets, but it could have been a lot worse. The UK definitely is still open for business.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.