Commenting on the Chancellor’s eighth Budget, Stewart Dunn, Hampshire Chamber Chief Executive, said: “Members will welcome the reductions to corporation tax, the continued freeze on fuel duty and the abolition of national insurance contributions for the self-employed. There was also encouragement for micro entrepreneurs through tax free allowances. For those who compete with large online businesses, there was an attempt to level the playing field by tightening the VAT rules for foreign-based internet retailers.
“George Osborne said he had put ‘rocket boosters’ on the backs of enterprise and productive investment but smaller businesses will see more value in this Budget than larger ones. He has gone some way to mitigate the effects of our iniquitous business rates system by introducing higher payment thresholds that mean some small High Street shops and businesses will pay no rates at all. That is particularly welcome, but we wanted to see much more fundamental business rates reform tied to stronger incentives for businesses to invest in skills, plant and machinery. The jury is still out on whether his ‘road map’ for business tax reform will actually deliver tangible success within the lifetime of this Parliament.
“While there will be much interest in the requirement for all state schools to become academies, this must go hand in hand with measures to ensure young people have the skills that will make them ready for the workplace when they leave school.
“He announced a number of infrastructure schemes around the country including some improved rail stations in the South East but once again there was nothing specific about road or rail links in Hampshire. Neither was there any clarity on devolution measures for Hampshire.
“We are delighted with his announcement that £2 million in banking fines will be diverted to help fund children’s emergency hospital services in Southampton.
“Members working in the logistics industry and others for whom road transport is a significant operating cost will welcome the continued freezing of fuel duty for the sixth year running.
“Some members have criticised other specific measures such as the increase in insurance premium tax. The new rate of 10% on top of an increase last year will hit businesses as well as homeowners and consumers. The rate of tax has risen by 66.7% in consecutive budgets. Having campaigned for a long time to reduce uninsured driving or to provide affordable flood insurance to households, members working in the insurance industry will see this as particularly disappointing.
“Overall, George Osborne wanted this Budget to be seen as putting the next generation first. It was a reasonable attempt to deliver stability, protect growth and maintain confidence, especially among smaller businesses. As ever, the devil is in the detail especially with the backdrop of slower than expected economic growth and OBR forecasts of a weakening global outlook. It remains to be seen if the Chancellor has done enough to sharpen incentives for entrepreneurship and investment which are essential for maintaining the confidence of firms in Hampshire and across the country.”
