On 20 March Chancellor George Osborne unveiled the UK government's 2013 Budget. Tony Toll, CEO of AIC Group, outlines what it means for business.
This was overall a good Budget for business. There was a lot in there for companies, such as the reduction in corporation tax and the recognition that we are key to the growth in the economy with the creation of 1¼ million jobs. There was a lot for micro-businesses, namely the NICs [National Insurance Contributions] saving of £2000 which though applying to all firms, disproportionately impacts on micros. I certainly will not be making a recruitment decision based on this.
Also the shares in house-builders leapt in response to the support for the housing market, so three cheers for that. That’s great for the UK domestic market, but it won’t help with exports, although the current low value of sterling is helping by default! We need to win the ‘global race’ and create more highly-skilled jobs and increase once again our manufacturing base.
We need to win the ‘global race’ and create more highly-skilled jobs and increase once again our manufacturing base.
There was little for medium-sized businesses, particularly manufacturing, and exporters who are in a desperate global race. Yes the Chancellor did highlight the Government’s support for free trade agreements with India, Japan and the US. He said the word ‘export’ six times in his speech. For example he highlighted that “the OBR [Office for Budget Responsibility] make clear, ‘the unexpectedly poor performance of exports is more than sufficient on its own to explain the shortfall’.” But he didn’t say how he was going to address this.
There’s a simple action he could take to improve this markedly; free up bank lending and allow greater access to useable funding. We need banks to lend more to more growing businesses to allow the creation of more jobs. The Government’s business bank can’t fill the gap left by the banking industry. So it was disappointing that the Chancellor did not give any detailed initiatives to boost bank lending and though he did talk about this, he, along with his predecessors, has been talking about this for some time, for example Project Merlin, with little to show for it. That’s the only way we will achieve growth, create jobs and secure wealth for the nation, and our place in the global race. ♦
Tony Toll has been Chief Executive of AIC Group since 2006. He was previously managing director of Aerofrom Ltd, where he worked from 1987 to 2006.