THE City was left unconvinced by yesterday’s Budget, slamming Darling for failing to provide a clear outline on how the government was planning to reduce its huge deficit.
Banks were being sent a contradictory message, critics said, pointing out that Darling has asked nationalised banks such as Lloyds and the Royal Bank of Scotland to lend more to those that need credit while at the same time asking them to build up deposits in case of a further downturn in the economy.
Many however described the Budget as clever noting Darling skillfully managed to avoid mention of the deep cuts needed in the public sector before a general election. Workers in the Square Mile said the real Budget is likely to be announced after May.
Darling’s decision to increase stamp duty by one per cent on homes worth over £1m is also likely to lose him voters in the City. Some said the move was an attempt at starting an unnecessary class war at a time when the economy needs a mature leader.
The chancellor also made clear his plans to clamp down on non-doms, although as one worker pointed out the move was more of a petty dig at the Conservative Party chairman Lord Ashcroft.
DAVID FROST Director general, British Chambers of Commerce
After two years of economic downturn, the chancellor has clearly recognised the need to place business at the heart of this Budget. Doubling the annual investment allowance, help with business rates and allowing entrepreneurs to keep more of their gains will prove especially popular. The chancellor could have done more to set out a clear plan for the reduction of the budget deficit.
RICHARD LAMBERT Director-general of the 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, but it is the big fiscal decisions over the next 12 months that will really determine the UK’s future.
CEO British Bankers’ Association
It was all about fine words and promises in the run-up to the general election. At the moment what one requires is not this Budget but a public expenditure statement – the issue is debt – so what we saw was the wrong side of the equation. And on credit, it’s very difficult to say the banking industry must lend to propositions it doesn’t think are particularly creditworthy. It’s a complicated area and it can’t be dealt with in banner headlines.
Mayor of London’s economic adviser
Overall London is expected to share a far greater burden of the pain than any other part of the UK, and in return it gets a smaller share of the government’s pre-election largesse. Nowhere is this effect clearer than in the change to the stamp duty on house purchases. The government is raising the threshold for first-time buyers to £250,000. It’s a very good policy, but it will probably help non-Londoners more than Londoners.
This was a missed opportunity to help global businesses operating in the UK. It was particularly disappointing that the chancellor found extra money to help the creative industries sector while delaying yet again any commitment on the issue of profits earned abroad not being taxed if brought back to the UK which is a vital issue for the UK insurance sector.
City of London Corporation
Of course the City wants lending to small businesses to increase and we welcome all support for them. These enterprises are the bedrock of our economy and will be a key driver towards economic recovery and future growth. However, we cannot afford to let our banks be caught between demands for increased lending and demands for greater capital buffers.
Institute of Directors director general
The chancellor’s GDP forecasts are too optimistic and there is still no sign of a credible deficit reduction plan, so while we certainly welcome the specific measures to support small and medium-sized businesses, we need to hear a lot more from the government on debt reduction. We remain convinced that swift action to tackle the budget deficit is needed.
At best it was neutral, but it doesn’t give the understanding and right approach in terms of bringing down the deficit so I think we have a very, very long way to go. The bottom line is it’s a disappointment. The one thing that I did like was the greater emphasis on providing funding for businesses, indeed the support for small and medium sized enterprises. There were some good ideas there but as usual, words still need to be turned into action.
Director general BRC
Reviving consumer confidence is the route to growth and jobs. Thank goodness no new tax rises were announced. But customers needed to hear a convincing plan for bringing the public finances under control. The chancellor offered no reassurance that he understands spending cuts must be the key means to tackling the deficit and not tax rises which will wreck recovery. When we see the detail, it will need to be convincing.
Joint leader of Unite Union
The starting whistle for the election has been blown and it’s 1-0 to Labour. The last budget before the election shows leadership and responsibility during difficult times. Alistair Darling has focused on support for the young, growth, investment and jobs when Tory doom-mongers who spend their time talking Britain down would rather slash and burn our public services and leave working families to sink or swim.