The business lobby group welcomed a number of the schemes outlined by the Chancellor, such as a 10-fold increase in the Annual Investment Allowance, a 25% increase in the budget of UKTI to promote exporting, and the outright cancellation of January’s planned fuel duty rise.
“A 3p rise in January would have been nothing short of economic vandalism in the current climate,” said the Forum’s Chief Executive, Phil Orford. “In fact it would have been hard to imagine a worse start to 2013 for the UK economy.
“No doubt the Chancellor will have heard the nation’s collective sigh of relief at the news January’s hike has not just been delayed, but abandoned altogether.
“Fuel prices have reached a cliff edge, and the Chancellor has acknowledged this with today’s announcement. He has also clearly heeded the overwhelming objections from small businesses that high fuel prices are hampering their own growth ambitions on a number of levels.
“We had urged the Treasury to commit to the concept of a fuel duty stabiliser by the end of the current Parliament, so what we have here is temporary relief instead of a serious policy change with real lasting benefits, but we can’t see many businesses bemoaning that just yet.”
The Forum also pointed to more good news for SMEs in the shape of an extension to Small Business Rate Relief, and a 10-fold increase to Annual Investment Allowance up to £250,000.
“The increase in the Annual Investment Allowance to £250,000 is welcome but a tacit admission that the decision to cut the same allowance to £25,000 this year was a wrong one. Given that UK businesses are currently sitting on £700bn of cash reserves, it could be argued that the earlier actions of the Chancellor created a disincentive to invest through 2012, at a time when business needs confidence to create growth.
“Nevertheless, we welcome this increase and urge businesses to take advantage of it. There are big savings to be had here for firms who’ve been waiting for the right time to invest and upgrade equipment, and this kind of spending tends to wash right down the supply chain.
“We also massively welcome the news on SBBR, as will our members. This is a really important element of the Chancellor’s statement for small business.”
On the Chancellor’s intention to employ 1,500 more tax inspectors to clamp down on aggressive tax avoidance by big firms, he added: “Tackling tax avoidance is of course a sensible measure. HMRC have in the past focused too much on the SME end of the spectrum, so we see this as a healthy rebalance, but the likes of Starbucks have brought this on themselves.
“We are now starting to see a change in attitudes, with large corporates beginning to understand the need to contribute more to the Exchequer, and therefore the coffers of UK plc.”
In conclusion he said: “Overall the capital allowances, fuel duty postponement and SBRR suggest this is a good budget for small businesses in terms of cutting day-to-day costs. This is what we wanted to see, and to a degree we got that today.
“Whilst of course it is disappointing that government is missing some debt targets, the overall forecast suggests the Government should stay the course it is charting to maintain confidence in our economy. It is essential because the Government’s own credit rating is essential to some of its schemes such as Funding for Lending.
“We wait to hear more on the Business Bank, and of course just how much of the Heseltine Review the Government is taking seriously come spring.”