Yesterday’s Budget was a missed opportunity to help businesses through the downturn and will even deter would-be entrepreneurs, business owners have claimed.
Businesses were unanimous in their criticism of Darling’s widely anticipated second Budget, arguing that it offered very little to help them through the recession and no incentives for entrepreneurs.
In fact, the introduction of the 50% rate of income tax for those earning more than £150,000 a year was dubbed a disincentive to enterprise.
“I think this year’s Budget has totally discouraged enterprise,” said Matthew Riley, founder of fast-growth telecoms firm Daisy Communications.
“If entrepreneurs are vital to the recovery of our country’s economy, which the chancellor has said publicly very recently, then now was the time he should have stood up and showed substantial encouragement and vital support.”
“Many of those in this top bracket are entrepreneurs who will have risked their own capital and property to start new companies and create wealth in the UK.
There is no aid or reimbursement for the risks that start-ups take and this change in tax will be a further deterrent for anyone entrepreneurial looking to enter business.”
Matt McNeill, founder of eTickets.to and Sign-up.to, criticised the move as short-sighted: “Now [entrepreneurs are] being told that should they make a real success of things they'll have to give half of what they earn back. What an incentive. These are the people who are most able, and likely, to leave for more hospitable business climes, taking jobs with them. I think come April next year you’ll see a lot of business talent at the departure gate of Heathrow.”
The measures that were introduced to support businesses, such as the £750m fund for companies investing in technology projects, £1bn for green industries, and allowing loss making firms to reclaim tax on profits from the last three years, were met with a lacklustre response.
Commenting on the technology fund, Doug Richard, serial entrepreneur and former Dragon, said:
“It’s hogwash. It is simply a continuation of a series of failed policies based on flawed philosophical principles, the key one being that they can choose which industries will be winners. No one has ever been able to do that, a government certainly cannot.”
In a statement broadcast last night on BBC News, Darling defended his actions. He said: “Every decision I made in the Budget was underpinned by fairness, and that’s why the burden of paying for the investment will fall on those who can afford it most.
He also insisted that the Budget offered targeted support for businesses. “W
e will support investment in the growth industries of the future, on which Britain’s success will be built,” he added.
“Considering that small businesses will be the ones to pull the country out of recession, the budget does pitifully little to support them,” said McNeill.
Crimson Business Ltd. 2009
