George Osborne today announced the budget for the next year in a plan which showed a major effort to help businesses lead the way to economic recovery.
The chancellor has been forced to reduce his growth forecast by half, leaving it at just 0.6% for the next year. In order to meet this lowered target Mr Osborne is looking to businesses to make the biggest impact with a new ‘Employment Allowance’. This will remove £2000 off the NI bill for every business in the country, which many SME’s will benefit from and should encourage them to take on more staff.
Still focused on businesses Mr Osborne will reduce corporation tax, in April 2015, which will be reduced by 1% giving Britain the lowest business tax out of all major economies at just 20%. The chancellor is hoping this will show the world that ‘Britain is open for business’. Employers will also be able to double the size of tax-free loans that they can offer to workers for travel costs etc.
John Walker, national chairman, Federation of Small Businesses, said, ‘The Budget opens the door for small businesses to grow and create jobs. The Chancellor has pulled out all the stops with a wide-ranging package of measures to support small business. FSB says the housing initiative will help reinvigorate the construction sector in which many of our members operate. National Insurance cut goes beyond what we were asking for and we are pleased to see the scrapping of the 3p fuel duty due in September.’
The budget promised to raise the income tax threshold to £10,000 in 2014, the planned fuel duty planned in September this year has been scrapped along with the planned increase in beer prices which have actually been reduced by 1p per pint.
The Chancellor has also announced a new initiative where the government would ‘help to buy’ homes. This would see new buyers who could afford the mortgage of a property but not the deposit take a loan of 20% of the house price from the government.
Critics of the government over the lack of investment to get the economy going may be appeased by the promise in this budget to invest an extra £3bn into infrastructure from 2015-16.
Not everyone has been pleased with the announcements made today, Unite, general secretary, Len McCluskey said, ‘This is a budget for the few by the few that attacks the many. Millionaires are days away from getting a £40,000 tax cut from the Tories, but George Osborne is using the budget to attack hard-working public sector workers. The heralded £10,000 tax threshold offers little hope other than an extra pound or two in low waged workers’ pockets, while again helping the higher-waged. If he really wanted to show he was on the side of the worse off, who aspire to get through the week, he should have raised the national minimum wage by £1 and drop the senseless plan to give millionaires a tax break in a few days time.’
