We’ve all heard what chancellor George Osborne has in plan for the economy and the businesses that populate it, but what do those at the coal face think?
Despite a number of business-related policies emerging from the Budget 2014 speech, opinion is largely divided when it comes to the entrepreneurs and business leaders GrowthBusiness has spoken to.
More on the Budget 2014:
- Full transcript of George Osborne’s speech
- Annual Investment Allowance doubled to £500,000
- Osborne unveils ‘most competitive export finance in Europe’
- SEIS made permanent to aid start-up funding
- Apprenticeship Grants for Employers bolstered
Ed Molyneux, CEO and co-founder of FreeAgent, says:
‘There’s certainly a lot of positive news in today’s Budget for small businesses looking to grow and expand. I’m very pleased to see the government raising the rate of the R&D tax credit payable to rapidly-growing small and medium sized companies from 11 per cent to 14.5 per cent. The R&D credits have been a huge help to us at FreeAgent, as we invest heavily to innovate and grow our business, so this will be good news for other SMEs looking to expand.’
Rhydian Lewis, founder and CEO of RateSetter, says:
‘We welcome the news that ISA eligibility will be extended to peer-to-peer loans. The government is clearly acknowledging that something must be done to breath fresh life into this failing sector as one of the poorest ISA seasons on record comes to a close.
‘Research has shown that a third of savers would consider P2P ISAs, so this news could truly reinvigorate the ISA sector. The change has the potential to give cash-strapped retirees and young people struggling to get on the property ladder the return on their savings investments that they really need.’
Rob Halliday-Stein, founder of BullionByPost, says:
‘I think the national insurance exemption for under-21s is great. We have recently taken on four graduates and are planning to recruit more staff, and this incentive would encourage us to take on younger employees.
‘I also think it’s good that the government is trying to support companies looking to export. It’s really important but I think it would be more useful to offer companies tax incentives and practical support. The plan to double the amount of export finance would only benefit a small number of companies looking to export business to business. But it wouldn’t benefit companies selling directly to customers such as online companies like BullionByPost.’
Marc Glazer, CEO at Boost Capital, says:
‘Evidence that gross lending to SMEs is 13 per cent higher in 2013 to 2012 must be welcome news for small business owners who are the driving force behind the UK economy.
‘The Treasury’s move to develop a route for those businesses to find alternative lending is very encouraging, especially for those (often in sectors without significant assets to leverage) who struggle to meet the stringent lending standards set by high street banks. Alternative lenders who often use different criteria to judge whether to lend to a business offer an important option for UK businesses with strong ambition to grow.’
Chris Griesbach, commercial director at Probrand, says:
‘One of the central themes to emerge from the Budget was the news that the government is getting people back in work, with the UK now boasting a higher unemployment rate than the US for the first time in 35 years. With National Apprentices Week just behind us, the focus on getting young people “work-ready” and on the career ladder was a key element that business owners throughout the UK listened out for when tuning in to Osborne’s speech.
‘It was encouraging then when we heard news that the government will extend the grant for small business to support 100,000 more apprenticeships throughout the UK. If we are to provide young people with the skills necessary to enter the workplace and bridge the gap between education and the commercial world, then it’s these sorts of measures that we need to see more of – particularly if businesses are to commit to making long-term employment opportunities.’
Jonathan Diggines, chief executive of Enterprise Ventures, says:
‘There are some interesting strands in the Budget that may not get noticed. The review into SME lending should cast light on the problem that is holding back the growth of the small business sector. Extended tax reliefs on seed investments and investment into social enterprises are also welcome.
‘One measure of particular interest is the proposal for the British business bank to implement a wholesale guarantee programme. It doesn’t currently appear to be able to do this. This could signal a change of approach by the UK government – the US government has supported small firms very effectively for decades in this way.’
Paul Rose, chief executive of Rixonway Kitchens, says:
‘As one of the largest employers in Kirklees and as one dedicated to providing employment opportunities for young people, we were happy to see the chancellor acknowledge the importance of the manufacturing industry and the impact of apprenticeships in getting the country working.
‘We welcome the his decision to provide financial support to businesses considering employing apprentices and hope this will encourage more businesses to provide employment and training opportunities for young people through apprenticeship schemes to help tackle unemployment.’
David Brimelow, managing director at Duo UK, says:
‘For us, it is good news that the chancellor has outlined his intention to champion manufacturing as a key industry to aid the UK’s economic recovery. Following on from the EEF research findings, our Q1 results were very positive and this has been reflected in the manufacturing industry as a whole.
‘To support and prepare for growth, last year we invested £1.2 million in new machinery and our plan is to continue this investment throughout 2014. Reductions in energy and operating costs will help make it easier for us to continue to finance our business and to grow.
‘We are not just investing in plant and equipment but also in our people; we intend to up-skill our existing workforce, ensuring the skills needed for manufacturing remain in the UK. As a business that operates in the exports sphere we also welcome the doubling of lending for export finance to £3 billion and cutting interest rates by one third.’
Mark Seddon, CEO of CloudZync, says:
‘This is not a budget for Britain’s small, independent merchants. We heard nothing new on rate relief, corporation tax, or employment allowances – and despite the chancellor’s tub-thumping rhetoric on infrastructure improvements, £200 million is a drop in the ocean when it comes to maintaining the nation’s roads.’
Daniel Todaro, MD of Gekko, says:
‘With such seemingly positive news on the economy emerging from today’s speech, this is a spring Budget gearing the nation towards the polls by drumming home the achievements of the Conservative-led government over the past four years.
‘Between the increase in personal allowance to £10,500, the major reforms of ISAs, the cutting of beer duty by 1p a pint and the fuel duty rise planned for September now scrapped, you wouldn’t be wrong in thinking that this was a party political broadcast a year early encouraging Brits to vote Conservative.
‘Let’s not be fooled by the announcements – another five year fixed term, possibly single party government like the old days, may not seem so appealing to all, especially to those who have seen their benefits cut or withdrawn, and NHS services destroyed including vital A&E departments. The Tories may paint a positive picture today, but let’s make sure to look beyond the next twelve months.’
Ben Halford, chief executive of Surface Generation, says:
‘The biggest challenges we have had to face are access to funding and finding qualified and good quality engineers. To date, we have secured all of our funding from individuals and spent far too much time and effort looking for staff in a small and ever shrinking pool of British engineering talent.
‘The announcement that the government is going to double the available finance for companies exporting to £3 billion and that interest rates on this will be cut by a third is welcome news but the amount is not enough and we will have to wait and see how easy it is to access.’
Adam Bromley, MD of PIQWIQ Publishing, says:
‘Obsorne claimed this budget was for “doers” but in my opinion was nothing that made the task of launching and growing a new small business easier.
‘Increased export finance and capital investment allowances benefit more established firms or those with ready access to capital. For small-scale entrepreneurs, serious obstacles remain in place. The moment you commit to a commerical lease, you are liable for business rates. Create an employee, national insurance raises the cost by 12 per cent and if you’re lucky enough to turn a profit in year one of trading, the government still wants 21 per cent in corporation tax.
‘Perhaps next year Obsorne should be bolder and consider further reductions in corporation tax, which falls heavily on UK based firms, less so on multi-nationals. At very least, the chancellor should offer an exemption to new businesses for the first two years of trading. As an entrepreneur, I found the speech a disappointment.’
Philippe Gelis, co-founder and CEO Kantox, says:
‘Doubling the funding for export finance (a government lending scheme for prospective exporters) to £3 billion and cutting interest rates by a third, Osborne claims to be creating “the most competitive export finance in Europe”.
‘However, the Budget didn’t address one of the major factors holding small businesses back from growing overseas: scandalous FX (foreign exchange) costs imposed on small businesses by the banks. On top of these fees, UK exporters have to manage the high volatility levels of exchange rates, mainly through FX hedging, yet another costly product when executed through banks and brokers.
‘As long as SMEs have to contend with the huge and often hidden banking costs facing them with every overseas transaction, they will be deterred from taking on international business opportunities. Ultimately, the government’s plans to boost exporting may prove futile unless Britain’s small businesses are supported by the elimination of the unjustified fees banks are charging them on their foreign exchange.’
Mat Deevey, managing director at cloudSMART, says:
‘Technology is a fast-growing sector with tremendous potential to contribute to the wider UK economy. Although a reduction in the corporate tax break has been a positive sign, this year’s Budget hasn’t gone far enough to encourage business investment in tech-based SMEs.
‘Ultimately, we’d like to see the UK government and local authorities support the technology sector by leading from the front and openly adopting innovative technologies. Three years ago, we identified an opportunity to save a local council £500,000 annually on their postal spend at the height of the recession, however, the project still hasn’t moved forward. By embracing technology solutions that save them both time and money, public sector organisations can free up resources for additional public services, as well as supporting SMEs that are driving growth and innovation in the UK economy.‘
Sitting on the fence
Shalini Khemka, CEO of E2Exchange, says:
‘This was a broadly pro-business Budget but not explicitly enough pro-SMEs, which represent some 60 per cent of the private sector workforce and account for nearly half of private company turnover.
‘Re-balancing the recovery away from a dependence on debt and consumer demand, to exports and business investment is vital so it’s very welcome that the chancellor has used this Budget to double the investment allowance to help deliver a more sustainable recovery. However, start-ups and SMEs are still finding it difficult to access funding to finance any increase in investment so this is the far more important issue that still needs to be addressed.’
Mark Stringer, MD at AHOY, says:
‘As a small business owner, I was pleased to hear the chancellor promise to continue the Employment Allowance, and to give every business or charity in the UK up to £2,000 off their employer national insurance bill. This will make it less risky for small businesses like ours to take on extra talent from their local communities as companies experience growth – a key part of the equation if we’re to start creating full-time employment and provide young people with the necessary skills to enter the workplace and get on the career ladder.’
‘I was disappointed, however, that the chancellor didn’t announce plans to reform business support. It’s so vital that growing SME’S are fully aware of the existing support available to them. At present, this can require a lot of leg work on behalf of the business in order to acquire all the necessary information– I’ve spoken to many people about certain schemes in the past who may not have been aware of them. This is why I hoped the chancellor would propose a single administrative body going forward in order to coordinate the available schemes and support for small businesses. For a growing agency like AHOY, understanding all the avenues of support is key.’