21 March 2013

Budget brings some good news among the gloom

With little room for manoeuvre available to him, the Chancellor has not been able to offer much cheer in this year’s Budget. There is still some good news to report though.
 
The planned 3p a litre fuel tax rise due to take effect in September has been scrapped. And a further one penny cut in corporation tax is promised from 2015. Another highlight is the decision to raise the income tax threshold to £10,000 from next year – a year earlier than originally planned – which will benefit some 24 million taxpayers and should help stimulate consumer spending. A new employment allowance will cut National Insurance bills by £2,000 from next April. And we were pleased to see a positive commitment ways to adapt and improve the much-derided Funding for Lending Scheme, which to date has benefitted mortgage lending rather than providing extra financial help for business. A promise is also made “to increase by fivefold the value of government procurement budgets spent through the Small Business Research Initiative (our italics). The words in italics are important here – this is not a commitment to spend more with small firms across the board. (For more information on SBRI see http://www.innovateuk.org/_assets/sbri_brochure_2011.pdf)
 
As anticipated, the Chancellor announced the creation of a Single Local Growth Fund, as recommended in the recent Heseltine Review, which Local Enterprise Partnerships will be able to bid for. Together with other leading trade associations we have already written to the Chancellor on this subject, warning that devolving funding in key areas such as innovation and skills would be counter-productive.