A steady-as-she-goes Budget in the box
Our roundup of industry and business leader responses to Budget 2014
George Osborne's fifth Budget has delivered some wins for business although yet more could be done, according to business and industry players.
John Cridland (pictured, left), director-general of the CBI
The Budget will put wind in the sails of business investment, especially for manufacturers. This was a make-or-break Budget coming at a critical time in the recovery and the chancellor has focused his firepower on areas that have the potential to lock in growth.
It's encouraging to see higher-than-expected growth in the short term, but as the chancellor recognised, tough challenges remain ahead, so it's right that the Budget reflected the fiscal reality. The economy needs to rebalance and this Budget will help businesses hungry to invest and export.
The CBI has long called for action to help provide our small and medium-sized firms with the tools they need to grow and invest. The doubling and extension of the Annual Investment Allowance will be a shot in the arm for businesses ready to invest and drive the recovery. The government heeded our call to make the Seed Enterprise Investment Scheme permanent to boost the range of financing options available to growing businesses and spur greater use of equity finance in small firms. The extension of the R&D tax credit for SMBs will boost early-stage, innovative businesses which can often be loss-making in their early years.
Meanwhile, businesses in some of the hardest-hit regions will welcome the additional funding for flood defences and pothole repair to reverse the damage inflicted on homes, families and commercial activities this winter.
Apprenticeships are a crucial tool in fighting skills shortages and youth unemployment, so this additional support is also very welcome - especially for smaller firms wanting to do more. We still need to better demonstrate the benefits of apprenticeships to young people.
Gary Calcott, technical product manager at Progress Software
It was interesting to hear the chancellor encourage investment in science and technology, if the UK is to avoid falling behind. However, if Osborne is serious about encouraging investment in this area, he needs to guarantee that programmes are in place to ensure he puts his money where his mouth is. Following on from his recent Year of Code announcement, I'd have liked to have seen him providing resources that will ensure children of all ages are given hands-on access to "ease of use" technology that can stimulate their interest in science and technology.
For example, giving students the ability to build an application by using a simple drag-and-drop interface is a great way of introducing them to the world of programming, without bogging them down in the complexity of having to learn a new programming language. It could even provide the foundation for Britain to produce a wealth of world-class developers that can help to boost this country's position as a European innovation hub for years to come.
Phil Orford, chief executive of the Forum of Private Business (FPB)
The headlines for business today are on energy policies and export. There are sizeable gains for UK manufacturers here in particular over the next few years. On export the chancellor has thrown his weight behind getting more businesses exporting. Our membership is confident about growth but much of that growth is UK-based so we needed to see such a commitment, though we will continue to work with the Treasury and others to develop even healthier export subsidies for business.
This was a Budget that offers some help to all levels of business, with perhaps a slight focus on the mid-size energy-intensive and manufacturing businesses, rather than the very small ones. However, it does help to tackle the cost of energy and makes good on the commitment trailed before the Budget to support those that look to invest, either in the UK - with a more extensive Annual Investment Allowance - or abroad, with a £3bn export support budget.
The package of support announced today will help UK businesses looking to export, particularly those which have struggled to secure export finance.
We are also pleased to see an extension to the AGE grant to support small employers to take on more apprentices this year and in the next. Small businesses' access to apprenticeship programmes must continue to remain at the forefront of the government's mind as it proceeds with apprenticeship reform.
We are a long way from the early years of the chancellor's reign, when the Annual Investment Allowance was reduced to £25,000. We are overwhelmingly supportive of the doubling of the current rate to £500,000, as well as its extension.
High energy bills are a key cost weighing down some small businesses. All businesses struggle with above-inflation increases in utility bills. There was an opportunity to tackle the Climate Change Levy for some businesses to give some savings in the short term but the chancellor chose not to do this. We will lobby for it to happen in the future. Nevertheless, this £7bn package is enormously helpful to the UK wealth generators.
We are encouraged by moves to see banks forced to signpost businesses to alternative lenders if they are turned down. Peer-to-peer financing is a rapidly growing area of finance for small businesses and one that needs greater awareness. The Forum is particularly delighted to see action in the area of deeds of priority. These can hold up businesses wanting to access finance away from their primary lender. This process looks as though it will be sped up dramatically and is a key plank for encouraging businesses towards alternative sources of finance. Finally, allowing ISA investors to invest in peer-to-peer finance is a further solid and welcome measure to support this industry.
Lawrence Jones (pictured, right), founder and chief executive of UKFast
As Budgets go, I'd rate it a seven out of 10. I think it was a "popularity" Budget. They are trying to win friends, and why not? You can feel it on every sales floor across the country; we are moving into a stronger economy. But we need something to continue the momentum, not stifle it and this Budget is trying to do that. It's positive and it's clearly a step in the right direction.
However, I still think that a flat rate of tax would go some way to solving the problem we have of international players coming into our market and taking their profits elsewhere. We need to make it easier for smaller firms to compete with those huge FTSE 100 companies that are able to send money to parent companies off-shore. How can we compete when small organisations are always paying more pennies in every pound? We need to level the playing field. This Budget doesn't go far enough to address that even though it did mention tax avoidance.
The focus when it comes to energy is on manufacturers needing the help with their energy costs. Without datacentres, the internet doesn't work; that's millions of people's livelihoods that lead back to our datacentres. We give the lion's share of our profits to energy companies to run those datacentres.
Alwin Magimay, UK head of digital and analytics at KPMG
The £42m investment in big data and algorithm research represented by the announced Alan Turing Institute will propel Britain forward as a market leader in data and analytics.
This is really welcome news for the UK. Data scientists are what computer programmers were to the UK economy in the nineties. We as a nation need to industrialise this discipline to ensure that British business can prosper from understanding the potential of the data and turn it into a competitive business advantage.
The investment of £42m is a powerful signal to businesses, academic institutions and investors to sit up and realise that big data isn't just a term coined by the technology world but that it presents a real opportunity for UK business to gain value from the abundance of data being created in a digital and connected world.
We are only at the very beginning of this revolution but the power of data is not new to KPMG. We are already supporting a variety of early-stage companies in this space through our digital innovation network. We have recently announced our data-scientist summer academy programme that will help to create a much-needed pool of data scientists in the UK and are close to announcing yet another exciting and transformational development in this space.
Today's Budget announcement gave a number of benefits to SMBs. With business rate discounts and enhanced capital allowances in enterprise zones extended for three years, there is potential for companies to grow and drive productivity from within.
Peter Grant, chief executive of CloudApps
With the business rate discounts that the chancellor has announced today, SMBs have been given the chance to pursue growth. Receiving these benefits means that companies are able to focus on improving their own workforce and invest time and money in driving innovation internally.
This is a helpful nudge from the government but truly aspirational businesses have to take the bull by the horns themselves. By focusing time and resources on developing individuals within a company, we can make employees take control over corporate objectives and push productivity from within, rather than being totally reliant on a crutch from the government.
Duncan Higgins, director of marketing at Virgin Media Business
I feel concerned by the lack of references to digital technology in the Budget.
To use Osborne's words, if we want to outsmart the rest of the world, we need to be more switched on to the power of digital.
And given that Britain's digital economy will be 10 per cent of GDP by 2016, it's surprising that there was just one mention of the word "technology" and no mention at all of "digital" in the chancellor's Budget.
However, the doubling of the business investment allowance could supercharge the economy if digital benefits from that extra spending. Investment in digital doesn't just boost the IT sector, it boosts Britain - it's how employees work smarter, entrepreneurs find new markets, teachers give their pupils relevant skills for the future and doctors save more lives by sharing information more efficiently.
Anil Stocker, chief executive of MarketInvoice
George Osborne announced in his Budget "today we back businesses that export". He unveiled plans to double the amount of export finance available through UKTI to £3bn, at half the interest rate.
Many UK exporters are already funding their export growth through trading invoices to their foreign customers - enabling them to access working capital immediately as opposed to waiting for up to 120 days to get paid.
We know that cashflow to support export activity is the key concern for businesses considering geographical expansion - and often the reason why they put it off.
Banks are often unwilling to fund export activity or will only do so at a higher price, which is why, alongside UKTI, alternative finance providers have a major role to play in providing the fuel for our nation's export growth.
John Allan (pictured, left) national chairman of the Federation of Small Businesses(FSB)
The FSB called for financial reforms to go further than just the high street banks and called for investments in online lending platforms to be included in the ISA, as a boost to non-traditional lending. We believe this move will allow more retail investors and savers to benefit from the tax incentive and encourage more investment in small firms seeking alternative means to access finance.
Coupled with measures to bring forward regulation of the payment systems by a year and consulting on credit record sharing, this should help diversify the finance landscape and increase competition.
This was always going to be a "steady-as-you-go" Budget for business, designed to get the UK's financial affairs in order.
That said, all small businesses need to be bold and brave in 2014. Following the fall in unemployment, we know more than half of our members have aspirations to grow with many wanting to recruit and pay more too. The chancellor set the pace for some progress but there is still more to be done.
Reducing the corporation tax rate will make the UK more attractive for overseas investors. And, with about 57 per cent of our members wanting to grow in the next 12 months, doubling the Annual Investment Allowance for small firms to the end of 2015 will provide certainty and allow them to realise their investment expectations.
This is something we called for as part of rebalancing the economy. Our research suggested that only two per cent of members knew about the recent increase to £250,000 - meaning most firms hadn't taken advantage of it. This change should encourage greater investment, so increase communication about the allowance to encourage uptake.
Our first quarterly Small Business Index for 2014 shows utilities remain the main cause for rising business costs for more than half of small firms and as a result the FSB has continuously called for action on energy taxes and increased transparency in energy prices.
We do have concerns about the extra costs of introducing a new pound coin. Small firms may have to pay out to replace machinery. But there is no doubt that counterfeit coins and notes can seriously damage a business; not only are they worthless, but a small business may be prosecuted if they pass them on.