2009 pre-Budget report: The small business review

We sum up the response to Darling's latest offerings

There were few surprises in today’s pre-Budget report, except perhaps the drop in Bingo tax. But while a few titbits were thrown to older voters, what did the small business community think of Darling’s festive offerings? We’ve summarised the reaction of the UK’s entrepreneurs here:

Matt McNeill, founder eTickets and Sign-up.to : “I’m not particularly surprised with the pre-Budget report to be honest. There was nothing there that came as a huge shock. I was disappointed with yet another increase in National Insurance but apart from that there’s not a huge amount to write home about.

It’s interesting to see the government lowering Corporation Tax on patents but I can’t really see that doing a huge amount for many people. The same goes for the extension to the EFG and Time to Pay schemes – they’ll certainly benefit some businesses but won’t really do anything for me.”

Simon Ball, CEO of Coverzones : “Darling’s Pre-Budget Report again contained a disappointing lack of measures to really help and encourage small businesses. While the extension of the EFG and the delay in corporation tax increase are to be welcomed, the fact of the matter is that this government has spent billions backing a handful of banks and done nothing of substance for the entrepreneurs and SME community.”

Charlie Mullins, managing director, Pimlico Plumbers : “I’ve just listened to Alastair Darling and quite frankly I don’t believe it. This has got to have been the worst budget for businesses, for workers I have ever seen. Ramping up National Insurance is no way to get us out of trouble. Small businesses, the backbone of the economy have been attacked at the very time when they need help. These are the people who are going to get us out of trouble, and penalising them is plain stupidity in my book.

“It looks like the only thing on Alistair Darling’s and Gordon Brown’s mind is getting elected again in the summer, although I do thing this is highly unlikely. The only people who are going to be happy about this are those in need of a new boiler and bingo enthusiasts. Now, obviously money to replace old boilers is good for people and good for our industry, but, unlike the government I can see past my own self interest – we desperately need to cut back, not keep on borrowing against the future of our children, and after this statement, our grandchildren.”

Stephen Bentley, CEO, Granby Marketing Services : “Clearly the issue of banker’s bonuses is top of the agenda, with the government walking a tricky type rope between stopping big banking bonuses, upsetting the financial sector further and the public perception of ‘obscene’ rewards in the current climate. It’s frustrating that this has to be done in such a messy way, when really the original contract regarding the bank loans should have clearly stated that it is unacceptable to use the money for bonuses.

For us as a response and fulfilment business, potentially the most interesting part of these announcements is capital put aside for innovation and technology. We invest heavily in R&D so funding in this area is always welcome, and should encourage more green shoots.”

Laura Tenison, founder and managing director, JoJo Maman Bébé : “The chancellor’s pre-Budget speech has offered us a pathetic response to the huge problem of reducing the fiscal deficit. The great British public is not stupid and it is plain to see that his policy is to delay the pain until after the election.

“Naturally as a retailer I am pleased that there are no nasty surprises such as an increase over 17.5% VAT or VAT on children’s wear and that the rise in corporation tax will be staved off.

“The policies which I will be looking into more carefully are the 10% corporation tax on profits achieved off UK patented products. For an innovative company like JoJo this could make the high cost of patenting some of our designs more worth while.”

Karen Darby, founder, Call Britannia: “I’m not going to bleat and moan. We’ve got this disastrous deficit and you can’t make an omelet without breaking an egg. What do people expect?  The increase in NI has caught us a bit by surprise but that’s not necessary a negative thing. What they give with one hand they take away with the other and they’ve scrapped the Corporation Tax rise so that’s good.

“From our specific point of view the pre-Budget report is actually quite good news for us because the government is guaranteeing employment for under 24s. As a call centre business recruiting people in that age range we hope we get more support as a result.

“I’ve run businesses over two decades and come through two recessions. Business for me is in spite of government and in spite of the economy. You just have to work hard and be more competitive.”

David Soskin, Cheapflights and Howzat Media: The Chancellor is in a hole and what is required are drastic public sector cuts. With an election months away, he is merely paying lip service; so we are delaying the inevitable. The delay in corporation tax hike is welcome. What would be more welcome is scrapping the hike completely.   The repulsive NI tax is again as anti-enterprise as you can imagine. This has now become the favoured tool of the Socialist government as it is a wonderful double whammy: hitting businesses and employees; and by calling it ‘national insurance ‘ it is dressed up as something socially useful rather than just another tax. Increasing it at this stage in the economic cycle is plain nuts. It is a tax on jobs. We need to get people back to work.


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