Both upbeat and ‘disappointing’
ENTERPRISING bosses of small firms in Peterborough have backed the Chancellor’s emergency budget as a jobs creator for the city.
Owners and managers say that Chancellor George Osborne’s package of tax cuts designed to cut the nation’s ballooning multi-billion pound debt, will help employers to build their firms and take on more staff.
Paul Smith, managing director of local engineering firm Global Rebar Services, Fengate, Peterborough, which employs four staff, said: “Cutting national insurance will help businesses to employ people, and the £1,000 rise in Personal Allowances from next April is good news. The lowering of corporation tax to 24 per cent by 2014 is also welcome. Overall, the Budget is not half as bad as I had expected.”
Andy Vaughan, owner of Credence, a business consultancy based in Ramsey, near Peterborough, said: “I am pleased that both the threshold at which employers start to pay national insurance will rise above indexation and corporation tax will reduce giving a boost to small businesses across the region to aid the recovery.”
On the much-trailed Capital Gains Tax, there were “generous exemptions” for business assets, according to Stephen Collins, partner at accountancy firm Saffery Champness.
John Chillcott, chief executive of Peterborough-based Anglia Cooperative, which employs 3,200 people, said the decision to raise VAT from 17.5 per cent to 20 per cent was sensible and should not dampen consumer demand significantly.
Individual firms may have been pleased, but leaders of Peterborough Chamber of Commerce saw the Budget as “a disappointing speech for businesses in the East of England.
Chamber chief executive John Bridge said: “The reductions in corporation tax and small companies tax will be broadly welcomed.
“But the reductions in other business allowances from April 2012 are already leaving businesses wondering whether they will really be any better off. Manufacturers remain unconvinced that their industry will not be adversely affected – but the more defining question has to be, will any business actually benefit?
“In particular, this was a damning speech for innovation and new businesses in our region.” Mr Bridge said the Chancellor had paid lip-service to the contribution the private sector will make to drive growth and secure the UK’s economic recovery but with the exclusion of the East, along with London and the South East, from the £5,000 national insurance exemption for each of the first 10 employees of new businesses was a kick in the teeth for the only three regions in the UK that makes a net contribution to the Exchequer.
The Federation of Small Businesses (FSB), expressed concern that rises in employer NICS were not completely reversed.
Chris Spies, Peterborough branch chairman, said: “We welcome moves to give a national insurance holiday to start-up firms, but are concerned that with 70 per cent of firms operating below capacity, those businesses already trading will not be helped.”
At employer organisation the CBI, regional director Richard Tunnicliffe said that “the five-year route map for corporation tax provides much-needed consistency and certainty.
He added: “Taken together with proposals on foreign profits and intellectual property, these will help prevent and could even reverse the flow of companies overseas.”