The Chancellor’s ‘mini-budget’: Reactions from the business community

Recently appointed Chancellor of the Exchequer Kwasi Kwarteng has today unveiled his much anticipated mini-budget. But just how has the business community responded to the notable actions that are now set to be taken? Read on to find out more.

Emma Jones, CBE and founder of small business support platform Enterprise Nation, praised many of the new ideas being brought to the table:

“It’s bold, it’s agile and it’s speedy. Economists will be arguing for months to come, but small businesses will be waiting for the impact of this budget trickling down into their sales tonight.

“The new administration clearly set out its stall today and that it is firmly on the side of entrepreneurs and wealth creators. The tax cuts, both business and personal, will deliver confidence and unleash the entrepreneurial spirit that we know exists across the UK and to which the Chancellor referred so often.

“The UK’s small businesses have wanted growth acceleration but have had to be content with stagnation because of barriers to growth such as access to finance, business rates and employment complexity.

“The extension of EIS and SEIS and the pension charge cap reforms will be welcomed with open arms by the small business community, and we expect more start-ups to follow with an emphasis on supporting those who are 50+ to move from unemployment into self-employment.

“Thanks to the removal of IR35, many experienced individuals that left the employment market will now return. Our view for more than a decade has been that one of the most important things a government can do is to champion entrepreneurs and this morning’s statement and announcements most seriously deliver on that.”

Matt Parker, CEO of technology provider Babble, delivered some cautious optimism with regards to the government’s attitudes towards long-term stability for SMEs:

“The measures announced in today’s mini-budget will come as a huge relief to businesses across the UK. Our research showed that 92 per cent of British SMEs needed help from the Government to navigate the challenges we’re facing.

“So far, the announcements speak directly to the biggest worries amongst SME bosses and the support they’ve been crying out for – we recently discovered that 67 per cent of these leaders were calling on the new Government to put a cap on business energy bills and 35 per cent wanted an end to plans for a corporation tax hike.

“Plenty of worries still need addressing though. We found that SME leaders also want a reduction in insurance premiums, especially on mandatory personal indemnity insurance policies. Meanwhile, Brexit, a looming recession and insufficient support for digital connectivity are still big concerns that the government must respond to.

“SMEs are the backbone of the UK economy and it is therefore vital that the government is listening to the needs of business leaders, ensuring they’re aware of the mounting challenges they face, and providing support for both the short and long term.

“The energy cap is also only in place for an initial six months and there has been no OBR forecast to analyse the mini-budget. These new measures are welcome, but more support and clarity are still necessary to allow SME leaders to plan with ambition for the long term.”

Sarah Barber, CEO of Jenson Funding Partners, highlighted one move in particular which will have considerable effects on investors and entrepreneurs:

“The measures announced in today’s emergency budget are a huge boon for fast-growth businesses. Until now, it’s felt like successive governments were sleepwalking on EIS and EIS. It felt like we’d grown complacent, as the news agenda was dominated by crisis after crisis, with limited room left for long-term planning.

“No longer. Scrapping the sunset clause will give investors and entrepreneurs alike a much clearer path to future growth, and the increase to the SEIS investment cap will let entrepreneurs raise more money in less time.

“The impact of the latter point cannot be overstated: entrepreneurs should now have to spend less time fundraising, and more time doing what they do best - building a business. This is a fantastic commitment to British businesses from the new government.”

However, Danni Hewson, AJ Bell financial analyst, raised some concerns regarding the economic feasibility of the chancellor’s proposal:

“The new Chancellor barely had time to draw breath as he dragged rabbit after rabbit from his newly acquired hat. The big question troubling markets is how on earth he’s going to pay for all these long-eared prizes. The new government is gambling on growth, but markets aren’t overly keen on a gamble if they don’t know their odds.

“The decision not to present an independent health check on how well the country is placed to fund all this extra borrowing and all these headline grabbing giveaways has sent London markets and sterling tumbling. The pound’s fallen to its lowest level against the dollar since 1985 as big questions are asked about how expensive this gamble might really be.

“There’s plenty in this ‘plan for growth’ that should indeed achieve growth. The scrapping of the planned corporation tax increase might well be incentive enough for firms who had been considering investing elsewhere to plump for Britain.

“There were also promises to streamline the planning process for big infrastructure projects that often get mired in red tape, the creation of new enterprise zones with a whole host of goodies available to companies that set up shop in these designated areas and lower taxes for those that earn the most.

“Housebuilders and retailers were among the main industry beneficiaries of Kwasi Kwarteng’s mini-budget, with news that provides some relief at a time when the UK enters recession.”

By Matthew Neville – Correspondent, Bdaily

• Add me on LinkedIn and Twitter to keep up to date
• And follow Bdaily on Facebook, Twitter and LinkedIn
• Submit press releases to editor@bdaily.co.uk for consideration.

Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →