Yesterday the Chancellor of the Exchequer, the Rt Hon Jeremy Hunt MP delivered his Spring Budget 2023. The key headlines for businesses were:
- Concerted efforts to address the unfilled jobs causing a drag on our economy – including interventions on childcare; a voluntary employment scheme for disabled people and those with health conditions; and skills and training targeted at older workers.
- A replacement for the Super Deduction coinciding with the planned rise in Corporation tax – for the next three years, businesses will be able to fully expense investments in equipment for factories, computers, and other machinery, with a view to making this permanent in future.
- Little support for firms with their upfront costs – with no further reform of business rates, nor extended support for non-domestic energy consumers.
The Chancellor has acted to address the unfilled jobs blighting our economy. It is especially good to see the help on childcare and for over 50s workers.
The plans for full capital expensing are also a step in a right direction to offset the rise in corporation tax. But as the OBR highlight a high level of uncertainty, the jury is out on how much it will help compared to the Super Deduction scheme.
Our most recent survey on investment found that only a fifth of firms were increasing investment and a similar number were reducing it. This budget looks unlikely to change that dynamic.
This is especially true for almost half of businesses who told us they will struggle to pay their energy bills from April.
They cannot invest when they are fighting to survive. Beyond the £63m of additional support targeted for leisure centres, there is little that will provide comfort to these firms.
The Government also failed to reform business rates which we have repeatedly called for. If the UK’s innovative growth industries are to remain competitive on the world stage, then Government must shift the dial further on investment, both within the UK and from overseas.
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