UK Budget: Reactions
UK Finance Minister Rishi Sunak on Wednesday unveiled his latest budgetary measures to deal with the impact of the coronavirus pandemic. The following is a a round-up of reactions from various industry lobbies and other parties.
Confederation of British Industry director-general Tony Danker: "This Budget succeeds strongly in protecting the economy now and kickstarting recovery. It leaves open the question of UK competitiveness long term.
“Thousands of firms will be relieved to receive support to finish the job and get through the coming months. The Budget also has a clear eye to the future; to ensure finances are sustainable, while building confidence and investment in a lasting recovery.
“The Chancellor has taken a welcome, broad view on how to stimulate growth from the new Infrastructure Bank, to Help to Grow and incentives to take on apprentices.
“The super deduction should be a real catalyst for firms to greenlight investment decisions. The boldness of the Chancellor on this measure is to be admired, but moving Corporation Tax to 25% in one leap will cause a sharp intake of breath for many businesses and sends a worrying signal to those planning to invest in the UK.
“The government must now have a laser-like focus on the UK’s competitive position in the round, including fundamental reform of the unfair Business Rates system. "#
British Retail Consortium chief executive Helen Dickinson: "The Chancellor has listened to many of our concerns and we welcome the extension of key business funding schemes. This announcement provides some targeted support to struggling businesses across the country. Action to support the retail industry will be vital to reviving the economy – including business rates relief, restart grants and loans, and an extension to the furlough scheme.
"However, for many retailers the devil will be in the detail, with caps on funding limiting access to this support. Retail accounts for over three million jobs, spread across every region of the UK; supporting the success of our industry will be essential to unlocking consumer spending and driving forward the UK’s economic recovery."
UK Finance chief executive, David Postings: "The Chancellor has set out a bold plan to support the economy in today's Budget. The banking and finance industry has taken unprecedented action over the last year to support businesses and customers, and we will continue to work closely with the government to help the nation get back on its feet.
"This is a well constructed Budget that positions the UK as an open and internationally competitive place to do business and we welcome the measures set out by the Chancellor to achieve this vision."
Institute of Directors director general, Jonathan Geldart: "The extension to the furlough scheme will provide a vital cushion to support jobs as restrictions unwind and firms begin the costly process of rescaling."
"Restart grants and ongoing business rates relief give a cashflow boost to many firms that will struggle to make full productive use of their properties as restrictions linger. Widening income support for the self-employed is a step forward, but the Chancellor missed a trick by not providing grants for company directors who continue to be left out in the cold.
"The Chancellor's efforts to combine life support for the economy with measures to turbocharge growth is the right call. Vouchers for SMEs to invest in technology, and provisions for management training, will help address the UK's longstanding productivity problems whilst also boosting businesses' ability to bounce back from the pandemic. The recovery loan package will offer a helping hand to many firms, but more needs to be done to catalyse equity investment in our cash-starved start-ups and scale-ups.
"The prospect of higher taxes will no doubt bite for many firms that are still tending to wounded balance sheets. Delaying and tiering the corporation tax rise is a pragmatic approach, though adjustments to the plan should remain on the table as a clearer picture of the recovery emerges."
Royal Institute of Chartered Surveyors head of UK government affairs, Christian Cubitt, said: "With the country finally able to begin looking beyond Covid-19 thanks to the vaccination programme, this budget delivers the incentives needed that will help build our way toward economic recovery."
"From getting thousands more young people onto the housing ladder to breaking ground on transformative projects backed by a new UK Infrastructure Bank, the billions invested represent a shot in the arm for the sector and the levelling up agenda.
"Extending the business rates holiday and discounting these costs for the rest of the year is another positive step, particularly for small business that have arguably been hit hardest by the global pandemic.
"When it comes to stamp duty what we really need to see, and what RICS has been calling for, is a full and thorough review of all property taxation. We will also continue to call for a VAT cut for builders looking to retrofit existing homes – an important step in really helping to deliver a greener Britain."
EY Head of Tax Policy Chris Sanger: “In a move that went further than many expected, the Chancellor today set the UK’s corporation tax rate back a decade ... this firmly abandons the aspiration of former Chancellors, going back to George Osborne, of having the lowest rate in the G20 in favour of the far less competitive challenge of the best in the G7. This is the single biggest tax rise in the Budget, raising over £17bn a year by the end of the parliament and is almost 60% of the total tax increase.
“Whilst there was some good news for those with losses, who can now carry up to £2 million of losses back three years, larger businesses may prefer to use those losses against future profits which would otherwise pay tax at 25%."
“All in all, today was a tough day for larger businesses – with a six percentage point increase in corporation tax rate leaving them funding 60% of today’s tax increases. Whilst there was some relief on losses and today’s 19% percent rate was kept for some, these were targeted at smaller companies.”
Personal Investment Management & Financial Advice Association senior public policy adviser, Simon Harrington: "We are dumbfounded that the Chancellor has frozen the Pension Lifetime Allowance until 2026."
"Doing so penalises pension savers looking to secure their future and in the most extreme cases sees people left with no choice but to give up work. Freezing the lifetime allowance could see a number of people inadvertently exceed their allowance and, as we have seen previously with NHS workers, incur a 55% tax hit which they otherwise would not have to pay.
"Freezing both the Inheritance Tax and Capital Gains Tax also discourages the public from investing in our economy at a time when the Chancellor himself admits we need an investment-led recovery."
International Longevity Centre director, David Sinclair, said: "We won't Build Back Better or deliver the vision for a 'future economy' without recognising the economic and social challenges and opportunities which come from demographic change. Our workforce is getting older, our consumers are getting older, our carers and volunteers are getting older.
"Yet the Budget has missed an opportunity to recognise the enormity of the policy challenges which come from us living increasingly longer lives. Longevity could offer a huge economic return for UK PLC. By 2040, over-50s could be spending 63p in every pound. And supporting people to spend or work for longer could add 2% to UK GDP every year.
"Older workers have also been hit hard by the pandemic. The government must find a way of delivering a similar scheme for those older workers made redundant due to Covid-19."
Make UK chief executive, Stephen Phipson, said: "Given the difficult circumstances facing the Chancellor Industry will welcome the certainty and clarity he has provided about the route forward. This statement pursues a positive and fair middle road which balances the short-term need to avoid squeezing the recovery before it has started, whilst avoiding any artificial boost given the inevitable strong bounceback once the economy begins to open up.
"In particular Industry will welcome the extension of the furlough scheme and a clear recognition that we urgently need an investment-led recovery. The promise to consult on further changes to R&D is also welcome and government must now move urgently to implement this so further policies to boost levels can be brought forward."
Campaign for Real Ale's national chairman Nik Antona said: "Freezing alcohol duty is obviously better than a rise. However, CAMRA had hoped to see the Chancellor announce a cut in duty on beer served on tap in pubs and social clubs to benefit consumers and help the great British pub recover and thrive in the difficult months and years ahead by being able to compete with supermarket alcohol.
"The government's commitment to review alcohol duties in the coming months is welcome. CAMRA will continue to call for a lower rate of duty for beer served in pubs – an option available to the government now we have left the European Union.
"Reducing tax on beer served in pubs and social clubs would encourage responsible drinking in a supervised, community setting – as well as boosting jobs and local economies, helping consumers and benefiting pubs and licensees."
TheCityUK chief executive Miles Celic said: "The Chancellor's Budget is rightly focused on supporting the economy through the pandemic and boosting long-term growth and productivity. The focus on innovation, investment and infrastructure across the whole of the UK reflects many of the priorities our industry has long called for.
"Our industry is already the biggest contributor to Britain's public finances. However, the UK cannot forget it exists in a highly competitive global landscape. Changes to corporation tax need to be matched with a commitment to streamlining and simplifying the UK’s tax code, and we welcome the review of the bank surcharge which has long placed UK headquartered firms at a disadvantage to those in New York and in Asian centres. We look forward to seeing further detail on this proposal.
The Mayor of London, Sadiq Khan, said: "Today's Budget totally lacked an ambitious vision for building a better future for all who have suffered as a result of the Covid-19 pandemic.
"This has been undoubtedly the toughest year that London and the UK has faced since World War Two and while there is now some light at the end of the tunnel, Londoners and businesses will need financial support for months to come.
"The government owes it to the more than 120,000 people who have lost their lives during the pandemic, to the NHS and key workers who have done so much to keep us safe and moving, and to everyone who has followed the rules and put their lives on hold - to build a better and fairer country after the pandemic. Yet there was a distinct lack of good news today for the vast number of key workers earning low wages who got us through this crisis.
"Unfortunately, it is clear that there is no ambitious planning from the government for our recovery. We simply cannot afford to return to the entrenched unemployment of the 1980s which destroyed so many lives and communities. There was too little from the Chancellor today to kickstart the economy, create new jobs and protect existing ones or to provide the level of support our businesses and least well-off will need for many months to come."
Royal London director of policy and external affairs Jamie Jenkins: "This was clearly a Budget that needed to focus on boosting the economy as the pandemic eases, and there are a number of measures to see through the remaining months of lockdown, both for businesses and individuals. But there is also a recognition that the deficit will need to be reduced and the debt managed in the years ahead. The Chancellor has a difficult task in finding the balance between stimulus and taxation as he navigates this course."
SMMT chief executive Mike Hawes said: "Today’s budget provides some encouragement to an automotive sector hit hard by the pandemic and additional trading costs but it falls short of the support needed to transform the industry and market to the net zero future to which both the government and industry aspires. Confirmation that the industry’s calls for the furlough scheme to be extended until the end of September have been heeded and is extremely welcome as both the automotive manufacturing and retail sectors have suffered a massive fall in demand over the past year with showrooms still closed and supply chains disrupted.
"Measures to support investment and upskilling are of vital importance to the sector but more is needed if the government’s green recovery plan is to be a success. Ensuring the UK has the most competitive environment globally for business investment is essential so, whilst we welcome in principle the announcement of a ‘super deduction’ for investment, it is not clear if it will work for manufacturing and plant and machinery so we now seek the fine detail and, ultimately, business rates reform to encourage investment.
"Anything that encourages the recruitment of apprentices would have our full support and it is encouraging to see the accompanying “Build back Better: Our Plan for Growth” commits to upskilling and the need to address some of the weaknesses of the Apprenticeship Levy which does not work for many employers.
"In this crucial year, with COP 26 in the autumn and the sector facing a mammoth task in decarbonizing within just nine years, we had hoped to see more measures to support the transition. This is an opportunity lost, so we look ahead to this year’s Comprehensive Spending Review for the commitment to the infrastructure, incentives and wider competitiveness measures that will enable the UK automotive industry to be the global leaders in the shift to net zero mobility."