Responding to today’s Budget, , Director General of
the Institute of Directors, said:
“The Chancellor showed he has listened to business leaders today
with key reforms on business rates, the Apprenticeship Levy and
the Annual Investment Allowance. But for all of the individual
positive measures, including money for infrastructure upgrades,
this was a Budget that pulled its punches.
“Going into this Budget, IoD members urged the Chancellor to
prioritise help for Brexit preparations. It is not enough simply
to announce a potential ‘no-deal Brexit budget’, businesses need
to get ready now. While we hope the Chancellor’s confidence that
there will be Brexit deal is well-placed, firms have to look at
all possible scenarios and will be deeply disappointed to see no
funds have been allocated to helping them map out potential
outcomes.
“The Chancellor also acknowledged the scale of the productivity
challenge, but most of the measures announced today were too
small to even make it into the main speech.”
On Investment and Productivity:
“Businesses needed a shot in the arm to support investment in a
period of unprecedented uncertainty, and the Chancellor delivered
on that by raising the Annual Investment Allowance cap to
£1million. This is a measure the IoD have been calling for for
several years, and it should now bring some much-needed
confidence for firms to make plans to boost their productivity.
But, this Budget also missed a few tricks, particularly in
incentivising small businesses to adopt the technology they need
to drive up their performance.
“The initiatives to boost management skills and the diffusion of
best business practices to SMEs, particularly through the
Knowledge Transfer Partnerships scheme is a small but welcome
step. However, the announcements were slim pickings given the
substantive funding and focus we need to truly lift the UK’s long
tail of underperforming firms.”
On Digital Services Tax:
“New taxes warrant a clear justification and careful
implementation. The new proposed digital services tax may make
political sense, but it has been announced with scant detail on
how it will work apart from the revenue threshold,
which is lower than even the EU has suggested. The Chancellor
must proceed with extreme caution here.”
On Business Rates:
“Sky-high business rates have hampered the high street just as it
attempts to compete with the growing stature of online retailers.
The Chancellor’s announcement today, echoing our recommendations,
should give many firms the breathing space to invest and develop
new strategies. But this is ultimately a stop-gap measure at a
time when the business rates system requires much wider reform.
Support must also be extended to small firms outside the retail
sector, and the fact that the tax also acts as a clear
disincentive for businesses to invest in improving their
properties must also be addressed.”
On the Apprenticeship levy:
“Low take up of apprentices by small businesses has been a
quandary for the Government since the levy was introduced and
employers will cheer the decision to reduce the co-investment
rate for small firms. Coupled with the Chancellor’s recent
announcement on levy transfers, this move should help to unblock
the apprenticeship pipeline for non-levy payers. The onus should
now be on businesses across the board to take advantage of these
new measures when they come into force.
“However, technological and demographic changes will shift the
goalposts for employers more than ever in the coming years, and
the race to build genuine flexibility into the UK skills
framework is far from won. Looking ahead, the aim should still be
for the levy to do more heavy lifting. A wider training levy, one
that acknowledges a much wider need for flexible provision on top
of apprenticeships, should remain the goal for ministers as they
plan beyond this parliament.”
