Business broadly welcomed the Budget yesterday thanks to tax cuts and tax breaks - but there were also a lot of moans.
A phased reduction in corporation tax and cuts to employers’ National Insurance contributions and an increase in the investment allowance to £200,000 were applauded.
A hike in the minimum wage and a rebrand to ‘living wage’ - up to £7.20 next year and £9 in five years - drew a mixed response, with some saying it would cost jobs.
And, as ever, there were a host of the disgruntled who are worse off or those who failed to receive the boost they’d hoped for.
Here are some:
Dr Craig Berry, deputy director of the Sheffield Political Economy Research Institute at the University of Sheffield, described the rebranding of the National Minimum Wage as ‘gimmickry of the highest order’.
He said: “George Osborne’s budget speech was a masterclass in combining the rhetoric of change with reality of continuity. Britain has, according to Osborne, left ‘the age of irresponsibility’ behind. There is very little basis for this claim. It rests upon the proposal that governments should be compelled to run budget surpluses under ‘normal’ economic circumstances. This represents a staggeringly irresponsible agenda, insofar as it constrains government’s ability to borrow to fund very long term investments that will benefit future generations.
“At the same time, the government will continue to prop up the housing market through measures including the extension of Help to Buy and inheritance tax cuts. There were some minor reforms to the tax relief available to buy-to-let landlords (at the behest of the Bank of England), but Britain clearly remains a buy-to-let paradise. Our economy remains under the threat of a burst of the property bubble – and the threat is a severe one.
“The rebranding of the National Minimum Wage as the National Living Wage is gimmickry of the highest order, designed only to soften criticism of the continuing downward pressure on wages rather than bring about real pay rises, and it seems likely that any gains for employees will be offset by losses arising from significant tax credit cuts.”
Michael Dugher, MP for Barnsley East and Shadow Transport Secretary slammed the Tory Government’s first budget for failing to stand up for working families in Barnsley and for failing to address low productivity.
He said: “The country faces a massive challenge to make working people better off and to build a more productive economy, with the UK’s productive output lagging behind our international partners. At a time when productivity has grown by just 0.4 per cent on average since 2010, the Government needs to take decisive action to increase investment, boost skills and foster a culture of innovation.
“However, the Government has gone back on its pre-election infrastructure promises like the electrification of the Midland Mainline and they have placed their short term political interest over the country’s national interest by dithering over a decision on airport expansion.”
The Forum of Private Business said it was concerned the budget did not offer enough for the UK’s 1.2 million SME employers to grow.
Ian Cass, managing dcrector of the Forum, said: “We are underwhelmed by the budget as it raises too many concerns for our members to be able to invest, hire new employees and drive economic growth. There was little in the Chancellor’s statement to directly address the impact of compliance and red tape on SMEs.
“Changes on how dividends are taxed may, in effect, be a tax on success as small business owners, who pay themselves last, are left with a tax bill when they finally reward themselves for good company performance.
“This was also the only tax simplification measure outlined in the budget, despite the fact that employers spend an average of £2,900 on tax specialists to ensure compliance and have had to increase the amount of time they spend on payroll to take into account additional complications from the EU and Westminster. The green paper of pensions also limits the confidence of the UK’s smaller firms as they prepare for auto-enrolment deadlines by suggesting that they will have to become experts in this field.”
Mark Rigby, chief executive at Commercial Valuers and Surveyors, said: “This Budget offers no clear signal that the confusion around business rates reform is going to be resolved any time soon. While a clear ‘business tax roadmap’ published by April 2016 is welcome, the Chancellor had nothing new to offer those affected by a broken business rates system.
“Confusion surrounds business rates reform – on one hand, the Queen’s Speech committed to reform the appeals process through the Enterprise Bill due to be published in October, while on the other the wider business rates review will conclude by the end of this year.
“UK businesses want to see clear action and the first step is a clear structural timetable. CVS calls on the Government to address the real obstacles in the rates system by bringing certainty to revaluations, efficiency to the appeals process, and crucial transparency to business rates assessments.”
Angela Barnicle, director at Deloitte Real Estate, comments on the housing announcements in the Chancellor’s Summer Budget.
“Early in his speech, the Chancellor used a now familiar phrase ‘fixing the roof while the sun shines’. But he did not address fixing, or indeed building, of the rest of the house. It is now generally acknowledged that there is a crisis of housing supply in the UK, but there were no announcements related to increasing the housing supply.”
Chris Ingram, managing director of Continental Underfloor said the Budget had been disappointing for the housebuilding and construction sector.
He added: “Ignoring the need to place small builders at the heart of the plan for economic growth shows a lack of understanding of the changing market, particularly here in South Yorkshire. Home improvement applications have risen by 12 per cent across the UK since 2014, with the total spent on housing alterations per household reaching an average of £500 in the Sheffield region.
“Without policies to reflect this focus on home improvements and even more vitally, housebuilding, Steel City tradespeople are unlikely to increase revenues or build stronger businesses. Likewise, Sheffield families are unlikely to see an end to the housing crisis without the incorporation of their local SME builders into the recovery plan.”
Iain Craven, director in accoutancy firm EY’s government team in the North of England said plans to devolve powers needed to be backed by actions to improve transport.
“The Chancellor has reiterated his desire to see more devolution to the cities of the Northern Powerhouse. “This now needs to be backed up by consistent actions around the Northern Powerhouse, in particular transport connections. The establishment of the North as a statutory body and the announcements on roads and smart ticketing are welcome, but further clarity is required regarding the plans for the delayed electrification of the Leeds-Manchester railway line.”
Chris Hobson, director of policy and external affairs at East Midlands Chamber said there was a lack of real action on infrastructure spending beyond the proposed road improvement fund, to be paid for by ring-fenced Vehicle Excise Duty.
He added: “While it wasn’t explicitly mentioned, we await further details about two infrastructure initiatives mentioned in the written Budget which will have a real impact here in the East Midlands – the commitment of £5m of additional funding for Midlands Connect, to help develop its vision and strategy for transforming transport connectivity across the region in order to drive economic growth, and the allocation of the extended New Stations Fund to support a local bid for stations on the Robin Hood Line to Edwinstowe and Ollerton, subject to a business case, linking Nottingham city to the north of the county.”
Rory Delahoyde, managing director of HA Hosting, which operates a data centre in Sheffield said the Chancellor’s offer of further devolution deals in return for elected mayors could be a double-edged sword that pitted northern cities against each other.
“The Chancellor appears to have dangled a very large carrot to the Sheffield City Region, offering financial incentives in return for adopting the mayoral system used in London and Manchester, allowing public money to be used more effectively.
“However this is likely to see businesses in Manchester, Leeds and Sheffield compete against each other, particularly when it comes to major infrastructure projects, rather than create a system which brings about genuine investment in the North.”
Paul Raynes, director of policy at manufacturers’ organisation EEF, said: “Manufacturers will be sceptical about a training levy, especially as their financial investment in high quality apprenticeships already far outweighs the public subsidy available to them. The Chancellor has given welcome reassurance that the levy would only apply to large firms and will be directly controlled by employers.
“We look forward to discussing with the government the best way to ensure every penny raised would be spent on valuable training that employers actually need and want. There will be no tolerance among businesses for re-creating the failed and costly skills bureaucracy of the past.”