No red hot measures came from Osborne’s red Budget briefcase, according to business leaders
Labour leader Jeremy Corbyn took a swipe at Chancellor of the Exchequer George Osborne today saying Osborne’s 2016 Budget is the “culmination of six years of his failures”.
Here are seven reasons why Corbyn might be right:
1. Disappointing budget
Sam Bowman, executive director, Adam Smith Institute, said:
“Today’s budget was disappointing. Growth forecasts have been lowered, and the Chancellor’s failure to deliver any kind of growth agenda in the last Parliament has left the British economy vulnerable to a global economic slowdown. Even more worryingly, he doesn’t seem to care. There was nothing major in this budget to boost investment, and far from simplifying the tax system the Chancellor announced a raft of new levies that will make it even more complicated and wasteful.
“Mr Osborne seems so firmly focused on the politics of the budget that he seems to have ignored the economics of it altogether.”
2. Business rates overhaul was a let-down
Reasarch by Sage found that over half of UK small business do not feel that the chancellor takes small businesses in to account when drawing up the Budget. It also pointed out that a third of UK small business want business rate reform as a top priority from tomorrow’s budget.
Brendan Flattery, president of Sage Europe said: ‘Small businesses have been unequivocal that business rates are their top concern and they will be watching the budget closely. They won’t be happy with tinkering round the edges and will want to see the radical reform of a Shakespearean system that has been overtaken by the digital age.’
3. Not enough for small businesses
Brian Palmer, tax policy adviser at the Association of Accounting Technicians said: “The Spring Budget is hardly the grandstand event that it once was, especially given the rise of important announcements made in the Autumn Statement, and last summer’s “Emergency Budget”. Especially given recent market turmoil and the growing uncertainty of the EU referendum, his speech was expected to be somewhat short of controversy or surprises. The cut in Capital Gains Tax, the new Lifetime ISA and the new sugar tax provided a hat-trick of rabbits out of the hat which will steal the headlines.
“The UK’s 2.25 million SMEs will take some comfort from the announcement that small business rate relief is to be permanently doubled, with 100% relief for businesses with properties that have a rateable value of £12,000 or less. In addition, they will benefit from the lowering of corporation tax to 17% by 2020, along with the switch of business rate increases to be in line with the Consumer Price Index, which is typically lower than the Retail Price Index and expected to deliver savings of £1.6bn over the next five years.”
4. Chancellor stifling property market
Edward Heaton, property consultant, Heaton and Partners, said:
“It was no surprise that the Chancellor failed to make any changes to the stamp duty threshold which continues to stifle the top end of the London market. Indeed, the 3% surcharge on second homes will only accentuate that over the coming months. One might have thought that the huge dent in receipts by the Treasury from stamp duty might have encouraged the Chancellor to revise this.”
5. Sweeping cuts to disability benefits
Natalie Bennett, Green Party Leader, said:
“The chancellor’s repeated claim that the Tories have a long-term economic plan that is delivering a stronger economy is looking more absurd by the day.
“Let’s not forget that this latest round of savage cuts is partly driven by the fact that that economy is £18bn smaller than the Office for Budget Responsibility (OBR) expected only four months ago.
“Sadly, our faltering economy is not the only driver behind this latest toxic dose of austerity. Osborne, the most ideologically rigid chancellor this country has ever seen, has proved time and again that he is hell-bent on ignoring the needs of the majority in our society, and the urgency of climate change, so as to deliver a greater share of our wealth to the richest and vested interests like the fossil fuel industries.
“The sweeping cuts to disability benefits, that could see 500,000 people lose up to £150 a week, are particularly troubling. Far too many times we have seen this government make the poor and vulnerable pay for the greed and fraud of the bankers.”
6. Banking issues ignored
Rich Wagner, CEO and Founder of Advanced Payment Solutions (APS), said:
“I was disappointed to see that the fundamental issue of access to basic banking services was not discussed. We know from our research that currently, only 35% of micro businesses and sole traders we surveyed have secured a business bank account with a high street bank. Even more shocking, we also know that when denied an account, only 26% of SMEs said that their banks always suggest alternative solutions and providers when unable to offer support – suggesting a number of sole traders may be forced to operate through personal accounts and risk financial mismanagement.
“This is a severe problem and it is worrying that it wasn’t addressed by Osborne. Whilst it is promising to see that business rates were discussed to help those SMEs already up and running, the government need to help the UK’s small businesses that are held back from even reaching this stage.”
7. Climate change ignored
Caroline Lucas, the Green Party MP for Brighton Pavilion, said:
“Once again the Chancellor is taking the country down a dangerous path by ignoring the threat of climate change. This Budget locks us into fossil fuel dependency and completely contradicts the Prime Minister’s call to action at the Paris climate talks. His plans to cut tax for North Sea oil and gas – rather than investing in a just transition away from fossil fuels – are myopic and dangerous.
“By ploughing millions into road build programmes at a time when many local bus services are threatened and air pollution represents a public health crisis, he’s failed to do what’s desperately needed: hardwire the urgent need to tackle climate change and pollution into infrastructure spending. This Budget again ignores the huge economic, employment and energy security benefits of moving away from fossil fuels and towards clean, home grown renewable energy.
“This climate-wrecking budget shows that the Government’s talk of putting the next generation first is nothing short of sheer hypocrisy. If our Government was serious about creating a decent society for our children and grandchildren then they would be pulling out all the stops to support British firms and business in the renewable energy sector and to keep fossil fuels in the ground. And where is the mass programme of zero-carbon council houses that is so desperately needed?”