Now that the dust has settled, what did business leaders really think of George Osborne’s Budget?
My personal view is that, given the extremely limited room for manoeuvre, the Chancellor did a good job. Surprisingly good, in fact.
Reducing corporation tax was the smartest move; an encouraging environment for business is precisely what’s needed to stimulate growth
Adjusting tax on fuel was a popular, though the methodology looks like it was made in haste. Reducing corporation tax was the smartest move; an encouraging environment for business is precisely what’s needed to stimulate growth.
New funding for science facilities is sensible, though I think we need a much bolder strategy. And sticking to the plan of getting the deficit down will ultimately pay dividends, even though the medicine is hard to swallow.
It seems that fellow members of the Institute of Directors largely agree with me. According to a survey of 620 of our members, 58% of company directors are more confident about the long-term economic outlook of the economy as a result of the Budget, with only 9% feeling less confident.
The poll also reveals that a large majority of IoD members believe the Government’s economic leadership is sound and that the Chancellor’s Budget will have a positive impact on their businesses, as well as the wider economy.
Commenting on the survey, Graeme Leach, our chief economist and director of policy, said: “The economic recovery is fragile so it is good news that business leaders have responded so positively to the Budget. At a time when confidence could make the difference between recession and recovery, the IoD’s Policy Voice survey suggests that the Budget has improved the outlook for business investment.
“And at a time when international developments are making people worried, the Chancellor has helped steady nerves at home.”
I’ll leave you with some of the key findings from the poll.
Business confidence in the Government’s economic policy:
- 58% are more confident about the long-term economic outlook of the economy as a result of the Budget, with only 9% feeling less confident.
- 69% believe George Osborne is doing a good job running the economy as Chancellor, 14% think he isn't.
Positive impact on wider economy:
- 70% believe the Budget will have a positive impact on the economy, with only 6% believing it will have a negative impact.
Positive impact on IoD members’ companies:
- 55% believe the Budget will have a positive impact on their business, with only 8% believing it will have a negative impact.
Views on some specific Budget measures:
- 93% believe that reducing the main corporation tax rate to 26p this year and 23p by 2014 will be positive for the economy, with 74% stating that it will be positive for their businesses.
- 43% think the increase in the lifetime limit for entrepreneurs’ relief from £5m to £10m will be positive for their businesses.
- 48% think the improvement to the capital allowances for short-life assets will be positive for their businesses.
- 81% think that increasing the limits for investment under the Enterprise Investment Scheme is a positive step.
- 65% think moving an increase in fuel duty to an increased tax on North Sea oil production when the oil price is high is a positive step.
James Ollerenshaw sits on the committee of the London branch of the Institute of Directors, is chair of its Young Directors’ Forum and is managing director of Curzon PR.
Any views expressed in this article are those of the writer and do not necessarily reflect the views or policy of the Institute of Directors.
