30 October 2018

Despite moving to Monday, the Chancellor Philip Hammond could not avoid the Halloween inspired headlines — although he will have been pleased that the CBI thought that his Budget contained more treats than tricks.

Director-General Carolyn Fairbairn described it as rock-solid and said that it recognised the enormous contribution business has made to balancing the UK’s books through jobs, pay and tax.

“The Chancellor has come up trumps with a bumper package to spur firms to invest more into their factories and machinery,” she went on, “with the improved Annual Investment Allowance and incentives for spending on buildings.”

As Mr Hammond name-checked both the British Chambers of Commerce (BCC) and the Federation of Small Businesses (FSB) in his speech, it is not surprising that they welcomed their suggestions being taken on board.

The FSB went so far as to say it was his first “small business-friendly Budget” and particularly mentioned the £900 million of business rates support for small firms on the high street, the freeze of the current VAT threshold for two years and the protection of the Employment Allowance — which will now enable small employers to knock £3000 off their National Insurance bill.

BCC Director General Dr Adam Marshall said: “We are delighted that the Chancellor has listened to the voice of Chambers of Commerce and has boosted the Annual Investment Allowance to £1 million.”

All we need now, he continued, is a comprehensive Brexit deal that gives firms the clarity and precision they need.

EEF, the manufacturers’ organisation, saw the Budget as a practical, realistic statement from a Chancellor “who is wise to keep firepower in reserve should the economy enter choppy waters when the UK leaves the EU”.

Perhaps the least impressed of the business groups was the Institute of Directors (IoD), with Director-General Stephen Martin saying that it was a Budget that pulled its punches.

“The Chancellor acknowledged the scale of the productivity challenge, but most of the measures announced today were too small to even make it into the main speech,” he complained.

Noes to the left …

The one dissenting voice came, perhaps predictably, from the TUC which highlighted the new economic forecasts published for the Budget by the Office for Budget Responsibility (OBR).

These show that UK wages are not expected to return to their pre-financial crisis peak until at least 2024.

General Secretary Frances O’Grady said: “We need a plan to improve jobs and wages. That means putting the minimum wage up to £10 per hour now. And it means giving unions the freedom to enter every workplace and negotiate fair pay rises.”

Grand claims about the end of austerity will not undo years of cuts to public services, she concluded.