As expected the rather smug Chancellor has produced an anti-growth, anti-wealth creation budget despite supposedly prioritising these as necessary before all else.
Her mantra is invest, invest, invest but there can be no investment without profit and her tax rises, coupled with: red tape; flat lining productivity in the public sector; and energy costs as a consequence of Net Zero madness, are going to make everyone in Britain poorer and lead to joblessness.
Perhaps her mantra should be spend, spend, spend! £40 billion of spending, including upfront largesse for an unreformed and wasteful NHS.
The Chancellor’s plans for growth are pathetically low and will lead to the country declining in a world which is much more ambitious.
She has settled for long term decline, growth will be outstripped by inflation year on year. As a consequence the British people will become poorer and we will be unable to support public services and yet continue to face unlimited migration.
While The Independent Business Network welcomes the Chancellors decision not to increase Corporation Tax and to maintain EIS relief, we have serious concerns about the proposed increase in Employers National Insurance contributions.
This is a jobs tax and will hit family run and family owned businesses hard and will deter employers from expanding and taking on new workers. This will hit particularly hard SMEs coupled with the hike in the minimum wage, it will lead to job losses.
The government has said that its primary mission is to deliver growth in the economy. We welcome the government’s decision to change its fiscal rules to allow for borrowing to invest in infrastructure and public services to support growth.
The Chancellor has partially departed from Treasury orthodoxy. The new accounting for public investment is long overdue and the IBN has long called for this. However, public investment is no substitute for private enterprise and typically the Chancellor focussed almost entirely on government spending. A typically statist perspective.
The government should look to split the Treasury with one department focussing on the nation’s accounts and the second focussing on economic policy with a focus on growth and enterprise.
The decision to increase Capital Gains Tax is anti-enterprise and will depress business start ups and those taking risks to generate jobs. It will also have an adverse impact on Pension Funds causing problems for the future.
It could adversely impact on the number of homes for sale and could lead to a significant reduction in the size of the stock market as people move to sell. The hit on business inheritance will also attack family businesses, which are 85% of all U.K. businesses.
There were no serious reforms to Business Rates and support for High Streets and this is something we urge the government to look at in future Budgets. We urge the government to work to reduce taxation over the Parliament and reduce the size of the Civil Service. The Chancellor’s 2% squeeze on the state does not even scratch the surface.
Furthermore, real term increases in public spending announced by the Chancellor cannot possibly be supported by the lamentable growth targets.
John Longworth is Chair of the Independent Business Network of family businesses
