Chancellor Jeremy Hunt set out a string of measures in his 2023 Spring Budget promising to revitalise the economy, help households and boost business.
The Chancellor said the Office for Budget Responsibility had suggested the UK would sidestep a “technical recession” and that – in the months after the disastrous Lizz Truss/Kwasi Kwarteng mini-budget – “debt servicing costs are down, mortgage rates are lower and inflation has peaked”.
He said his Budget for Growth offered “prosperity with a purpose”, the best investment incentives in Europe and biggest ever employment package – adding that the “optimists” had been right all along.
Labour leader Kier Starmer, however, said Britain was sick of being the “sick man of Europe” and the country could no longer afford the Tories. He said generous tax-free pensions allowances to encourage highly paid doctors to stay in the NHS for longer, for instance, were just a “permanent tax cut” for the wealthy.
While some business leaders welcomed the Budget, others said the Government had failed to go far enough to help those who needed it the most.
Nicholas Smith, director and head of tax at East Midlands chartered accountants Duncan & Toplis, called it a “resounding disappointment for SMEs across the East Midlands and the UK” as the cost of living crisis brought many to their knees.
He said: “Despite rolling reforms across sectors, the announced support to incentivise investment and boost the economy simply isn’t enough.
“Chancellor Jeremy Hunt seems focused exclusively on easing cash flow concerns for larger businesses – but it leaves SMEs to fend for themselves at a point when consumer confidence and spending is plummeting and prices continue to climb.
“The Government claims to have the lowest headline tax rate in the G7, even after the impending rise in April, but small and medium sized businesses don’t seem to be presented with any measurable way to reduce their expenses.”
Ann Stanley is an SEO expert and founder of the Anicca Digital marketing agency in Leicester.
She said there were positive signals that might increase business confidence – such as keeping the energy cap and the freeze on fuel tax – and welcomed inflation slowing and fact that recession will be avoided. She also welcomed plans for an East Midlands investment zone in the north of the region.
She said: “I’m really excited about the new regeneration project for the East Midlands and investment in renewables and continued tax breaks for investment, especially life science and renewables.
“From Aniccas' perspective, investment in AI and the creative industries is really important.
“I love the idea of Returnships for over-50s, as we have already seen a 20 per cent demand for our digital boot camps from this age group, for our D2N2-funded training.
“On a personal note I like the ability to grow my pension but I am concerned that some of the measures are delayed, such as the extra childcare hours which won't hit until next year.
“However, quite a lot of things were not mentioned, such as investment in insulation and energy efficiencies, lack of windfall tax, or the investment in NHS, social care or house building.”
Eileen Perry MBE DL is managing director of ER Recruitment in Leicester and co-chair of the East Midlands Chamber’s Enterprising Women Network.
She said balancing parenting with full-time employment was a challenge faced by many families, so was pleased to see childcare measures at the centre of the budget.
She said: “Many talented people currently find themselves making the difficult decision between working to pay for childcare or taking time away from the workplace to raise a family.
“Extending free childcare hours to parents will help with that while also hopefully helping to fill the 1.1 million current job vacancies described by the Chancellor.”
Lisa Botterill, a corporate partner at Shakespeare Martineau in Leicester, said it was good the Chancellor was offering an element of respite for the nation’s pubs but said while extra financial support for childcare was welcome, inevitably it would not be enough.
She also hoped increasing the pensions annual allowance would have the desired effect of encouraging doctors to work later in life, supporting the struggling NHS.
David Santaney, chief commercial officer at specialist tax advice and SSAS pension administrators, WBR Group, in Leicester, also welcomed the pensions changes to help high earners stay on in the workplace.
Entrepreneur and philanthropist Dr (Prof) Nik Kotecha OBE – founder and former chairman of Loughborough-based Morningside Pharmaceuticals –felt it was a budget focussed on economic growth, businesses and enabling people to work.
He said: “For the business community I was heartened by the full capital expensing plan, which will bring significant investment into the UK, and help nurture onshoring of manufacturing.
“But, in the same instance I was disappointed that the super reduction was not renewed, and the 25 per cent corporation tax increase retained.
“However, on the latter it was good to see it being weighted against the new investment allowance, so only 10 per cent of companies will in effect pay the full amount.
“The significant increase in defence spending will also be welcomed by many manufacturing industries.
“The three-month extension to the Energy Price Guarantee, as well as key changes to help people ‘back to work’ like extra childcare benefits and pension tax breaks are three particular highlights.
“Others include an extra £100 million for the charity sector, and specifically £10 million towards mental health and suicide, which are significant areas of support for my family’s foundation, The Randal Charitable Foundation.”
Emily Smith, managing director at AVW Fabrications and operations and finance director at Michael Smith Switchgear, in Leicestershire, said while a freeze on fuel duty would be welcomed by many firms it was important that the Government continued doing more to encourage longer-term action on carbon reduction.
Bruce Spencer-Knott, MD of Lincolnshire civil engineering firm Minster Group, was delighted that the government had committed to spending £200 million dealing with potholes.
He said: “Road users hate them and we love to fill them, so it's terrific that this is getting more attention and funding, alongside support for sustainable transport schemes."
Nicki Robson, managing director at Leicestershire-based HR firm Breedon Consulting many families and bosses had been waiting for news on additional support with childcare costs.
She said: “The increases in funding announced today will have a really positive impact for those parents and guardians who are – or who want to be – in the workforce.
“Hunt outlined that households working up to 60 hours a week will get 30 hours of free childcare per child over nine months, and this will start as soon as paid maternity/paternity ends.
“This will really help those wanting to get back to work – and employers who want team members back in the business – that might otherwise be struggling to make it work financially.”
