By Steve Goodman of Business Breakthrough Coaching
With tomorrow’s Budget looming large on the horizon the speculation as to what the Chancellor will do is mounting. Steve Goodman of Business Breakthrough Coaching outlines what he expects to see in the famous red briefcase.
It is very difficult to predict what might be in this budget. The measures to deal with deficit have already been announced and are being implemented. We have very little idea of what room for manoeuvre the Chancellor has, if any.
Generally UK business has endorsed the action on the deficit as tough but necessary. This view has been supported by the OECD in their recent report. The cuts are only part of the solution to the deficit; economic growth is the other half of this equation. So what business is looking for from the budget is a clear, deliverable strategy for growth.
What I am hoping we will see are measures to boost economic growth that will really make a difference and not just tinker around the edges. For me this would include:
• Maintain as much government investment as possible in infrastructure, roads, rail, air transport and high speed broadband. We still have a lot of catching up to do and this would give a boost to the construction sector.
• Address the “equity gap” for small business. Traditional bank overdraft and lending products are increasingly unsuited to the needs of many small businesses with growth potential. Many have had their balance sheets decimated in recession and so cannot obtain bank loans to fund their recovery. Also many new businesses have knowledge rather than asset based which makes them a difficult proposition for bank lending. I would like to see some radical measures to help these kinds of businesses access equity funding rather than bank borrowing.
• This would mean being prepared to be bold and take some risk on further tax relief for long term equity investors in small businesses and with schemes such as the loan guarantee scheme.
• Manufacturing is enjoying resurgence. This needs to be nurtured and built on. The government must demonstrate that they are serious about supporting manufacturing and see it as a vital component of the economy. Restoring tax reliefs for manufacturers investing in new plant would help do this.
• Government must stop piling extra costs on businesses. This means something must be done about the tax take on fuel. Just not implementing the next 1p of duty is not enough. It cannot be beyond our government’s capability to stabilise the fuel tax take (currently around 83p per litre).
• Not directly within the Chancellor’s remit but some real reform on business regulation. So far all we have had is more regulation. What we need to see is cutting of regulation and where possible exemption for smaller businesses especially in employment regulation.
• Finally taxation. The 50p tax rate cannot be removed now, but it would be good to hear the Chancellor state that this level of taxation is not long term policy and he will be looking to reduce personal taxation when government finances permit.
This is what I hope to see or something very like it. What I fear is just tinkering round the edges without any substantial change, but only time will tell now.
Join us on