By Marcus Leach
When all was said and done in the House of Commons today (Wednesday) we were left with a picture that was, in many regards, broadly unchanged, as Chancellor George Osborne delivered the 2012 Budget.
There were few major surprises in the Budget announcement, with most measures aimed at ensuring Britain would 'earn its way in the world'.
Compared to last year's Budget, where the focus was very much on getting Britain to manufacture its way out of the quagmire it had found itself in, this year's was, according to the Chancellor, aimed at supporting working families, and was unashamedly behind business.
There was good news for the UK economy in general, with the independent Office for Budget Responsibility (OBR) revising up the growth forecast for 2012 to 0.8%, from 0.7%. Further to that the forecast for 2013 is 2%, for 2014 is 2.7%, and in the two years after that 3%.
"We do not want to be left behind," said the Chancellor, after announcing the damning statistic that last year Britain did more trade with Ireland than all of the BRIC countries combined. "We want to be out in front leading the way."
So, with that in mind, how would the Chancellor ensure conditions were right for businesses to flourish?
Business measures at a glance:
- Simplified tax system for small firms with a turnover of up to £77,000.
- Government support for £150m of tax increment financing to help councils promote development and an extra £270m for the Growing Places fund.
- Corporation tax cut to 24% from next month. By 2014 it will fall to 22%.
- Enhanced capital allowances for businesses setting up in new Scottish enterprise zones in Dundee, Irvine and Nigg. A Welsh enterprise zone to be created in Deeside.
- Tax relief for the video games, animation and high-end television production sectors.
- Government considering enterprise loans for young people to start their own business.
However, these measures are not enough, according to the Institute of Directors.
“While any tax reduction is welcome, the Chancellor has not done enough to free business from the burdens and barriers that are holding economic growth back," Simon Walker, Director General of the Institute of Directors, said.
"Businesses dearly want the opportunity to invest, create and build, but George Osborne must go much further if he wants to fire up the engines of the economy. There was a bold move on Corporation Tax, but in the bigger picture this is still not far enough or fast enough.”
Elsewhere, as was expected even before the Budget was announced, the top level tax rate was reduced from 50p to 45p, although that will not come into effect until April of 2013.
As for alcohol there will be no rise in duty, although the duty on cigarettes will be set at 5% above inflation, which equates to 37p per packet, while fuel duty remained unchanged from existing measures.
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