By Max Clarke

Despite assurances from the Coalition that Wednesday’s Budget will introduce no new taxes and relieve regulation in order to allow the Nation’s businesses to thrive, nearly half of small and medium sized enterprises (SMEs) are nervous about the impact this week’s Budget will have on their business, new research from business software and services provider, Sage UK, today revealed.

In anticipation of the forthcoming Budget, the Sage UK Omnibus surveyed 1,200 SMEs from its 800,000 strong UK customer base to gather opinion on a range of issues, including the proposed re-introduction of ‘enterprise zones,’ the opening up of finance for SMEs, and the 1% raise in National Insurance due to come into force in April.

The Prime Minister, David Cameron; the Chancellor, George Osborne; and the Minister for Business and Enterprise, Mark Prisk have all promised that this will be the most “pro-growth Budget this country has seen for a generation,” yet the results of Sage’s Omnibus survey reveal both nervousness and caution among the UK SME community.

Only 5% of entrepreneurs were optimistic about whether the Budget would benefit their business. The much heralded creation of enterprise zones to stimulate growth in regions across the UK, also received a muted response among SMEs. Sage’s research found that while a majority (71%) think the creation of enterprise zones could have a positive impact, most are still sceptical about the genuine growth it will facilitate in key regions across the UK.

Proposals to raise National Insurance contributions by 1% for employers and employees for people earning more than £20,000 a year were unpopular with SMEs. 50% of entrepreneurs strongly opposed the move, due to come into effect in April, and only 13% claimed to support it.

UK SMEs were also left unconvinced by Project Merlin, an agreement between the Government and the UK’s four biggest banks designed to stimulate lending to small businesses. The Sage Omnibus found just a quarter (27%) of businesses believed the initiative will have any impact on the amount banks lend, while almost half (46%) believed it would have no impact.

Brendan Flattery, CEO, Sage UK, commented: “Just like every business owner up and down the country, we’ll be watching Wednesday’s Budget with great interest. There’s been a lot of positive rhetoric about what’s in store, and if the promises live-up to the hype and this is truly a pro-enterprise budget, it can’t come soon enough for the majority of small companies.”

“We’ve had a lot of talk about stimulating growth and a few false dawns, so it’s not surprising that firms remain cautious about the measures outlined ahead of the Budget. Clearly our customers still have concerns about where finance will come from over the coming year, so it will be particularly interesting to see how this is addressed,” added Flattery.

The results from the latest Sage UK Omnibus come a month after The Sage Business Index 2011, which surveyed 6,455 SMEs across Germany, France, UK, Canada, and USA. Respondents amongst the UK’s 1,510 companies surveyed, noted that Government business bureaucracy and legislation and a lack of access to finance are the least favourable aspects of doing business in the UK.

Government’s handling of economic challenges and its attitude to businesses was cited in third and fourth place, although this was more positive compared to most of the other countries surveyed.
Less than a quarter (22%) of the UK’s business owners thought the Government was doing enough to provide sufficient support and advice for those starting a business, and only 14% viewed business information and advice made available by the Government as something they would particularly rely on.