From our perspective this was a decent Budget for business. We’d set out our ‘wish list’ – see the blog post I wrote yesterday called ‘What budget should Osborne deliver on Wednesday’ – and George Osborne did a lot to meet our expectations on Corporation Tax. We very much welcome his proposal to accelerate the reduction in Corporation Tax to 26 per cent. There is more work to be done on, but this measure begins to kill the growing perception that the UK is a high tax country.
We’re also pleased that the Chancellor made a clear statement that the 50 per cent rate of income tax is a temporary measure. The 50 per cent rate will damage long term economic prospects and needs to be repealed as soon as possible. In terms of immediate relief the reduction in fuel duty was also good news. Businesses small and large that are experiencing a sharp increase in their cost base will be grateful that the duty was cut slightly. The scheduled 5p increase on a litre of petrol would have been very painful to many IoD members.
So overall this was a Budget aimed at changing perceptions and boosting business confidence about long-term economic prospects in the UK. The Chancellor didn’t have much money to play with but he played his hand well on the big issues.