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Budgets are always a cause for concern, with Peter being robbed to pay Paul which makes it difficult to know if you really have come out better or worse off. Small businesses such as the shops or some tool manufacturers who read this magazine are often the most likely to feel the effects of changes to taxes or fuel prices, for example.
So here is our round up of reactions from various groups representing people with smaller businesses.
The Federation of Small Businesses
The FSB, welcomed a Budget speech it said had few alarms and surprises for the UK’s 4.5 million-strong small business community.
John Wright, FSB National Chairman, said: “The Treasury’s dithering since the Pre-Budget report and a series of damaging tax rises in the last year have totally undermined the Government’s position with small businesses.
“Alistair Darling’s first Budget is unlikely to make that situation much better, but it is a relief that it will not make it any worse either,” he added.
“We welcome the freeze on fuel duty until October, but the issue is unlikely to go away. The cost of fuel is damaging small businesses and their customers in every industry and every area of the country.
“Plans to reform regulation, improve access to finance by expanding the small firms loan guarantee scheme, help female entrepreneurs and for a goal to give at least 30 per cent of public sector procurement to small and medium-sized businesses all have our support. These plans will need to be backed up with real action.”
The chancellor’s approach to green issues, and particularly transport were a concern. “Small businesses are totally opposed to road pricing that does not discriminate between essential business use of the roads and non-essential use. We’re worried that the Chancellor appears to be pushing ahead despite massive opposition,” Wright claimed. He also pointed to another area were green issues could cause problems: “The laudable aim to make all new non-domestic buildings zero carbon by 2019 must be handled carefully because it could restrict small businesses’ access to premises.”
The British Retail Consortium
BRC stated its concerns about some of the chancellor’s environmental policies even more strongly than the FSB, claiming that The Chancellor is using claims of tackling social and environmental ills as an excuse to take yet more tax from hard-pressed businesses and consumers. BRC is particularly opposed to his emphasis on carrier bags as a cause of climate change , calling it ‘outrageous’. He has failed to offer significant incentives that could make a real difference to the environment and to the economy.
Reacting to today’s Budget the BRC said Alistair Darling was simply trying to disguise the need to plug holes in his finances.
Stephen Robertson, Director General of the British Retail Consortium, said: “We’ll need to look beyond the headlines to the inevitable unannounced detail before we can fully assess this Budget, but it’s clear the Chancellor has huge holes in his accounts and is trying to hide an old-fashioned tax grab behind a bags and alcohol smokescreen.
“Retailers are driving efforts to achieve social and environmental objectives but the Chancellor’s green tax gimmickry is simply an excuse to take yet more money from hard-pressed businesses and consumers.”
On compulsory carrier bag charges, Stephen Robertson said: “It’s outrageous to suggest carrier bags are a major cause of climate change. There are many more significant contributors. Why does the Government believe improving the energy performance of homes only deserves a feeble £26 million?
“Retailers have already committed to reduce the environmental impact of plastic bags by a quarter by the end of this year. Huge progress has been made without any need for legislation.
“Customers took a billion fewer bags in the last 12 months and retailers are over half way to achieving the target on cutting the use of new plastic. This shows bans or taxes are not the only way.”
On incentives for companies to use greener vehicle fleets, Stephen Robertson said: “While focussing on the tax regime for cars, the Chancellor has ignored our calls to reward the use of greener vehicle fleets. Voluntarily, retailers are investing massively in achieving more efficient transport, including electrical and bio-fuel vehicles. This should be recognised and encouraged.
“The Chancellor has also done nothing to reduce VAT on energy-efficient products, such as low-energy light bulbs and efficient household appliances. If he had it would have made them more affordable for customers, supported retailers’ efforts at promoting these goods and made his first Budget genuinely green.”
The Forum of Private Business
The FPB responded to claims made in the 2008 Budget speech by Chancellor of the Exchequer, the Rt Hon Alistair Darling MP, that the UK is “one of the best places in the world in which to do business”. Research from the FPB suggests that most owners of small businesses disagree. In a recent ballot of members 97% of respondents believed that recent tax changes have, in fact, made the UK a worse place in which to do business.
“This Budget is more about what has not been done to help smaller businesses, rather than an announcement of any genuinely proactive and positive measures,” said the FPB’s Chief Executive, Phil Orford. “While there are some welcome initiatives, they do little, if anything, to offset the tax burden due to be implemented in April. The Chancellor has missed a golden opportunity to convince the small business community that he is on their side.”
Mr Darling said his Budget would continue to provide “stability and certainty” for businesses over the coming year, and championed the UK’s main rate of corporation tax as being the lowest in the G7. It will be cut from 30% to 28% in April. However, the FPB points out, the lower rate paid by many smaller firms is set to rise to 22% by April 2009.
