By Max Clarke
Just over half of senior executives feel satisfied that the Budget has done enough to enable British businesses to grow over the next 12 months, according to a survey of attendees at a business seminar hosted by Investec Corporate.
While nearly a quarter (23%) of executives surveyed feel more confident about the future prospects for their business as a result of the Budget, the majority (74%) see no reason to change their view despite doubling the cut in corporation tax to 2%.
Michael Portillo, former Chief Secretary to the Treasury and Secretary of State for Defence commented: “The Budget was clearly directed towards business with the intention of shoring up support from the market towards the Government’s strategy and it appears to be well received.
"However", continued Portillo, "growth figures for 2011/12 were disappointing and inflation figures pose problems for future levels of public spending. Higher growth forecasts for 2014 should be taken with a pinch of salt and it looks as though we will be facing several years of sluggish growth. The Coalition must be wary about how good a picture it will be able to present to voters in 2015.”
The survey also showed that of the Budget’s various pro-growth measures, business executives rated the 2% reduction in corporation tax cut as being the most effective initiative followed by the promise to strip out £350 million of business regulation. In third place was increasing the Enterprise Investment Scheme qualifying company limits to 250 employees and gross assets of £315 million.
Also commenting is James Arnold, Investec Corporate & Institutional Treasury: “Corporates appear to have given the Chancellor’s Budget their cautious support but remain sceptical in a number of areas. Time will tell whether growth in the private sector will be strong enough to generate real momentum behind the recovery.
“While it is encouraging that most businesses have prepared themselves for the prospect of interest rate rises, too many are still failing to take basic steps to protect themselves against volatility in FX markets.