The Chancellor has passed four out of five Budget tests set by the ICAEW to deliver a Budget that will help drive the economic recovery.
David Lermon, Wales director of the ICAEW, said: “Businesses have played their part in helping get the economy through the downturn – by maintaining employment and revenues. However, they also need certainty and confidence in the recovery. Whilst the focus on jobs and investment is important in the short term, businesses will want to know more about what they can expect in the medium to long term. They need greater clarity on how departmental spending is going to be cut and also if taxes are going to be raised. This will have a direct influence on their plans to invest and grow.”
Chief Executive Michael Izza gives his ratings on the Budget tests set by the ICAEW:
Make no major tax changes for business – passed
“The measures announced, particularly for small businesses, including the one-year reduction in business rates, will be welcome assistance. However, businesses remain concerned about their longer term prospects and the cost to them of the plans to reduce the deficit.”
Be clear on the timelines for government schemes to help businesses – passed
“Schemes such as the time-to-pay have been lifesavers for many business. Now that they have clarity on how long such schemes will last, they can plan their businesses more effectively to ensure they meet their obligations in full.”
Manage public spending better to help tackle the deficit – failed
“The Budget does not go far enough to improve the transparency and accountability of UK public spending decisions. Currently, we do not know enough about how much is being spent and how well it is spent. This Budget was a missed opportunity to underpin long-term sustainable public finances and create a culture of genuine fiscal responsibility by reforming the way money is managed, accounted for and scrutinised.”
Not damage UK competitiveness – must try harder
“We all know that we cannot go back to business as usual. However, what ever measures are introduced, such as a global tax on financial institutions, they cannot impact on the country’s long term competitiveness. Whilst nothing the Chancellor announced damaged UK competitiveness, he did little to improve the environment for doing business in the UK.”
Tackle the problems impacting on businesses’ ability to grow – passed
“We know from our members that some of the challenges that businesses have faced during the downturn, is accessing finance. It will only help if it reaches those who need it most.”
