A tough Budget for businesses, says Hampshire Chamber of Commerce
Hampshire Chamber of Commerce has responded to Wednesday's Budget, describing it as "tough" for businesses and has urged the government not to impose further taxes on job creation or business growth.
Ross McNally, chief executive and executive chair, said the Chamber understood the need for short-term pain to help drive investment, but added that Whitehall needed to be pragmatic.
"From higher National Insurance contributions for employers to capital gain tax increases for individuals and firms, a range of changes and measures will make this year a real challenge," he said.
"The prospect of a hit to the bottom line affects all kinds of decision making on the scope for investment in people, premises, equipment and tech.
"That’s especially true in the short term when you haven’t budgeted for extra cost. You can’t simply put up prices or improve productivity immediately," he noted.
McNally added that the key test for the Chancellor was the "extent to which such higher costs on business are balanced with measures to incentivise medium term growth".
"That’s because revenues raised from business taxes can only be sustainable if those required to pay them are making sufficient profits to do so."
He added: "On balance, we understand the need for short-term pain for help create the right conditions to drive investment and prosperity, but this is certainly a tough Budget for businesses with a heavy burden to carry."
The Chamber did however welcome Budget measures to help "mitigate the ‘hit" such as the 25% cap on Corporation Tax, the freeze on fuel duty and the continuation of the full-expensing system of capital allowances for investment in plant, machinery and IT.
But McNally said businesses now needed a 'contra deal’ with government.
"We stand ready to partner with policymakers to ensure there is an ongoing framework for growth and an industrial strategy that restores stability, enables investment in key infrastructure and boosts future economic prospects.
"But in return, government needs to be pragmatic. By all means, seek efficiency savings within departments and look to control public spending, but there should be no further taxes on job creation or business growth.
"If we depress business investment through a tax on jobs, it is simply counterproductive to what government wants to do and will act as a major disincentive to partnership for the rest of this parliament," he said.
Also reacting to the Budget, Paul Britton, CEO of Thames Valley Chamber of Commerce, had said: "This was trailed as a tough budget and local businesses have already been hanging fire according to our most recent survey, with almost half of businesses more concerned about tax rises than three months ago.
He added: "Time will tell whether this budget has built confidence or added to the anxiety that was already there.
"There is a lot to shake down in terms of the details on incentives, new costs and threshold changes for NICS but businesses will feel they are carrying the weight heavily of a new plan for renewal."
