Kitty Ussher, Institute of Directors
The crucial test for this Budget was whether it gave business the confidence to invest.
The Chancellor’s cuts for business rates and R&D tax credit are welcome.
But, when paired with hefty hikes in other taxation on the horizon, that may not be enough to convince business leaders to press go on their plans for growth in order to fund much of the Chancellor’s spending plans.
He had an opportunity to partially reverse his previous decisions on employment and profit taxes, made in tougher times.
He chose not to do so and the UK will live with a very high tax burden.
While promising a skills revolution the actual measures that were announced, while welcome, felt piecemeal. This will not give business confidence that we have a coherent plan to prevent future labour shortages for our post-pandemic era outside of the European Union.
Aria Babu, The Entrepreneurs Network
The British have shifted from being a nation of shopkeepers to a nation of online shoppers, spending a greater share of income online than any other OECD nation.
But yesterday Rishi Sunak announced a consultation on a new Online Sales Tax, ostensibly to help the high street. It is all well and good arguing that we should tax tech giants, but designing a fair system is easier said than done. Why should an independent dressmaker on Etsy pay more tax, so Mike Ashley can pay less?
It is hard to design a tax that hits Amazon, while exempting the SMEs who use its marketplace as we learnt when Amazon passed on the 2 per cent Digital Services Tax. In the pandemic, e-commerce grew by 68 per cent. Many who made the switch stuck with it.
This won’t help Britain’s sluggish productivity growth, partially driven by SMEs slow to adopt new digital technologies.
Will Tanner, Onward
Sunak had a much easier set of choices than he led us to believe. The OBR’s growth upgrade to 6 per cent for 2022 and scarring downgrade from 3 per cent to 2 per cent handed the Chancellor £50bn a year extra to play with. He did not have to choose between real terms increases for almost every department and delivering a surplus by 2024/5.
How he used that fiscal firepower was notable: reducing the taper rate on Universal Credit, increasing the minimum wage, investing in family hubs, and cutting both beer duty and high street business rates. These strengthen the social fabric of our communities. He also started his long term vision with skills, apprenticeships and R&D spending. But there were no long-term plans for business rates reform, planning, council tax or online sales tax. Road pricing and carbon taxes were also missing.
He can buy his team a glass of Rose, safe in the knowledge that the hangover has been saved for another day.