The 2012 Budget – were there any real winners?
I find the days and weeks around the Budget a singularly extraordinary time of year. Perhaps inevitably, I approach the budget from the perspective of how it will affect our clients and partners, but, given the breadth and range of sectors our teams cover, this encompasses a great deal.
Fundamentally, we want Britain and its businesses to be competitive. But it is clear that the current tax arrangements and underlying support base for business is insufficient to foster the Government’s ambition to consolidate Britain’s position as a compelling international marketplace.
And that is why the additional reduction in corporation tax, to 24%, this April, is a welcome next step. The commitment to lower it further in the coming two years should assuage some concerns about the place business holds in Government’s plans for the future. However, the Chancellor could, and should, have gone one step further and reduced employers’ National Insurance so that it is easier and quicker to offer jobs to talented people looking for work. At Proxima, we have created 70 jobs over the past year, but with this reduction in national insurance, this figure could have been much higher.
This was a Budget designed to show compassion to those feeling the strain, while offering an incentive to entrepreneurs and leaders to support the UK out of the current economic challenges through a cut to top line income tax.
The reality is that delivered neither of those things in any meaningful way. The Budget should encourage business, nurtured ambition and, lest we forget, tighten up Government’s control of its own funds, which continue to be too easily misspent and poorly coordinated. Government talks about growth being led by the private sector – if this is to be the case they need to push further to provide a stronger framework to enable businesses to drive that growth forward.