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Britain’s economy has turned the corner and plenty of positive headlines have heralded the welcome return to growth over the past months. But how firmly rooted is the recovery? As the economy picks up, there remain several threats to stable growth – the rapid growth of the housing market is a concern, as is the increasing cost of energy in manufacturing.
LondonlovesBusiness.com looks at what the key business institutions would like to see in George Osborne’s 19 March Budget.
The British Chamber of Commerce (BCC) says that recent data from the Office for National Statistics showing a fall in youth unemployment of 48,000, is encouraging. However, the jobless rate among young people still stands at 917,000 with young people nearly three times as likely to be unemployed compared with the rest of the UK population.
As a result, the BCC is proposing measures to promote business investment in young people aged 16-24. The measures include a new £100m Future Workforce Grant scheme; a two-year extension to the successful Apprenticeships Grant for Employers (AGE) scheme to help create 80,000 additional apprenticeships; and increased tax relief to encourage investment in young entrepreneurs.
BCC director general John Longworth said: “If the Chancellor wants to avoid a lost generation among today’s 16-to-24 year-olds, he must use the spring Budget to help businesses take on and train up young people, whether they are going straight into jobs or into apprenticeships. He should also extend tax incentives for individuals with deep pockets who invest in businesses started up by school and college leavers and graduates.”
Meanwhile, the Federation of Small Businesses (FSB) wants to see a Budget focusing on maintaining good conditions for enterprises. The FSB says it believes this should be done through completing reforms in key markets such as banking and energy, making government support relevant to small firms through better focused schemes and reforming the tax system to support enterprise.
FSB national chairman John Allan said: “With the recovery underway it is important that businesses begin to feel the measures already announced are having a positive effect on their business. This is why the Chancellor should look at ‘focus and delivery’ for initiatives already announced to create long-term growth.
“The FSB has welcomed the Government’s recent moves to support employment, notably the Employment Allowance and a pledge to cut red tape. Getting more competition and transparency in key sectors such as energy and financial services will greatly help small firms.”
The Confederation of British Industry (CBI)’s Budget submission calls on the Chancellor to prioritise measures to boost business investment and trade. The group expects robust growth this year and next but warned of the need to rebalance away from consumption to secure a sustainable recovery.
CBI director general John Cridland said: “The economic recovery is taking hold with businesses and consumers both feeling more confident but we must make sure that it really takes root and this can only be done through rebalancing.
“There are encouraging signs that business investment and net trade are on the up and now is the perfect time for the Government to get full square behind it, particularly in the case of smaller firms. Above all, British businesses must have secure and affordable energy that enables them to compete internationally and keep jobs in the UK.”
The Royal Institute of Chartered Surveyors (RICS) says that the Chancellor should look again at the nation’s Stamp Duty thresholds, which it says is “an archaic tax structure which is distorting the housing market”.
RICS head of UK policy Jeremy Blackburn said: “This is a very important Budget for the Chancellor and one which will shape the economy in the run-up to the general election.
“A major area of concern in the property sector, at present, is the current Stamp Duty system which is both out-of-date and distorts the market by taxing buyers disproportionately high amounts should they go just one pound over the pre-set thresholds. A more intelligent, modern way of taxing property sales is needed for a market which is changing at a rate of knots.
“We would also like to see George Osborne provide more detail as to exactly what is meant by new garden cities and precisely how they would benefit communities and the economy.
The London Chamber of Commerce and Industry has identified several key areas it believes the Chancellor should address in his Budget including, maintaining a skilled workforce, delivering a secure business environment, keeping London’s transport network moving and giving local and regional government powers to deliver growth.
Recommendations include provision of a £1,000 grant for businesses that take on a young employee. To commit to delivering the remainder of the Tube development plan and to secure financing for new fixed river crossings for east London; and to allow the greater London Authority (GLA) and London councils to retain all property taxes and allow the GLA to set the rates and thresholds.