Chancellor Jeremy Hunt delivered a significant Spring Budget speech today, but how is industry responding to it so far?
Among the headline measures announced were a 2% cut in the rate of National Insurance contributions, as well as freezes on alcohol and fuel duty.
Institute of Export and International Trade (IOE&IT) director general Marco Forgione has spoken on the budget, paying particular attention to the consequences for small businesses:
“Our members welcome the increase in the VAT threshold from £85,000 to £90,000 announced by the chancellor today but we have been pressing for the threshold to be set at £100,000 after it's been frozen for more than 7 years.
“Small businesses are the lifeblood of our economy, and getting more of them trading internationally is essential to sparking growth in the UK economy. In the UK it is estimated that 99% of UK businesses are SMEs, but that only 9% of these are exporters."
Skills needed
Forgione also identified the need for more from government to help firms find or train skilled workers and to ensure the development of a stronger growth and trade strategy:
“The chancellor quite rightly talked about encouraging more working aged people into work, tapping in to the UK's talent pool, but there was nothing about helping get the skills businesses need. We called for action to help MSMEs access the Apprenticeship levy and employ apprentices but there's was a gap in addressing the wider skills agenda.
"News of additional support for energy secretary Claire Coutinho and the allocation of up to £120m of additional funding to the green industries growth accelerator to build supply chains for new technology is to be welcomed and will help build UK resilience. There is more to do though on the UK's wider import strategy which has to form part of the UK long term plan for business growth.
"The confirmation that the fuel duty freeze and 5p cut are positive and will help tackle inflation, particularly for the UK's essential haulage and logistics sector.”
Industry response
Other industry bodies have also been responding to the speech from Hunt.
The Confederation of British Industry (CBI) said on X that it welcomes draft legislation on the expansion of permanent full expensing for leased and rented assets, which it called a “game-changer for many SMEs”, adding that it “opens up more UK business investment”.
Make UK also responded on X, noting that its “pleas” – and those of small businesses – had been listened to with the extension of the Recovery Loan Scheme until 2026.
Speaking before the budget, British Chambers of Commerce director of policy Alex Veitch said there needed to be a “stable, long-term plan for tax policy”, saying that “it is good to see the government supporting investment in research and development” as well as advanced manufacturing.
Starmer speaks
Starmer gave an immediate response to the speech to say that the Conservatives “give with one hand, take even more with the other”, suggesting that the tax burden on workers and businesses was not producing quality public services. He also suggested that tax cut headlines belied stealth increases elsewhere:
“People know the thresholds are still frozen and that a stealth tax increase is on the way in the form of council tax.”
As Hunt also announced the replacement of the UK’s non-dom tax status provision, Starmer described Hunt as given to a “short term cynical political gimmick”, pursuing “headlines over delivery” on resolving economic issues.
Finally, he called for a “sustainable plan for growth” – and a 2 May election.
