Darling upsets almost everyone
Too much or not enough, or both?
The Chancellor's pre-Budget report got a distinctly mixed reaction from business and technology groups. Although tax cuts for companies focussed on research was welcomed, no-one welcomed the hike in National Insurance.
The Federation of Small Businesses welcomed the delay in the 1p increase in corporation tax for smaller firms and the extension of the £1.3bn enterprise finance guarantee. But the FSB said there should have been more assistance offered to small companies and pointed out that the increase in National Insurance payments would not be encouraging firms to take on more staff.
John Wright, FSB National Chairman said: "The Government has missed a chance to really tackle a difficult credit market by failing to create more options for access to finance, and more competition among high street banks. The Government should have addressed this challenge and looked at options such as a regional stock exchange to help small and fast growing businesses capture finance."
Alistair Darling also offered tax cuts to firms making money from patents. Barry Murphy, tax partner and head of tech at PwC, said: "After prolonged noise the technology industry will welcome the decision to introduce the patent box. However, as implementation is not until 2013 it is unlikely to benefit companies until 2020 at the earliest - assuming normal investment cycles return. In addition, the announcements would suggest this is only for Pharma and BioTech, and no doubt further consultation will be required to ensure other technology sectors are not neglected. "
The CBI damned Darling on two counts - failing to restore confidence in the UK's credit rating and failing to act on job creation and growth.
Richard Lambert, CBI Director-General, said: “There were two tests for this Pre-Budget report. First, would it increase the credibility of Government plans to restore the public finances? Second, would it be a platform for job creation and economic growth? The Government has failed on both counts."
The CBI also described Darling's attempt to curtail bankers' bonuses as a futile headline grabbing gesture which could see financial services companies leave the UK.
But it welcomed the move to a 10p corporate tax for companies dependent on patents. ®