Pundits and experts were quick off the mark to comment on Jeremy Hunt’s first offering…
By HAL WILLIAMS
BRITISH Chancellor Jeremy Hunt’s Spring Budget has prompted some cooing and fluttering from the pigeons on the BV windowsill, but hasn’t quite set the cat among them.
Hunt (quoting the independent Office for Budget Responsibility) said he now believes the UK economy will escape a “technical” recession this year. Inflation is expected to fall from 10.7 percent (Q4, 2022) to just 2.9 percent by the end of 2023.
The tax and spending pledges he made for the next five years — affecting the jobs market, pensions, childcare, defence, and investment — are aimed at chivvying-up the country’s slow growth and dour mood. Pundits and experts were quick to get in contact with BV to share their verdicts.
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Jenny Tragner, head of policy at R&D tax relief consultancy ForrestBrown, said that while the Budget was “peppered with positive policies”, overall, it came up short. “(It) lacked a coherent narrative to help businesses navigate an increasingly complex tax landscape. The Chancellor set out his stall to harness British ingenuity, so it is fitting he has taken an inventive approach to reforming R&D tax relief … While enhanced support for SMEs is welcome, the qualifying criteria introduces further complexity for businesses already struggling to make sense of the raft of reforms announced at previous fiscal events, and set to come into force this April.”
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Pierre-Antoine Dusoulier, CEO at iBanFirst, said the general view of the UK economy had been “perhaps too pessimistic” last year. “While the current situation is not entirely resolved, energy prices are moving downward, credit conditions are improving slightly for consumers, and even new car registrations are on the up … With a bit of luck, perhaps the UK economy will avoid a recession this year — although more data regarding corporate investment and consumer confidence is needed to be certain.”
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Andy Briggs, CEO of Phoenix Group and the UK Government Business Champion for Older Workers, said the decision to provide “returnerships” for over-50s to return to work would help to ensure that older workers aren’t forgotten. “We cannot address UK productivity without using the talents of all ages in the workforce,” he said. “This means that work should be ‘levelled-up’ for a much wider group of people, with more flexibility and more opportunities to recruit, retrain, and retain.”
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Catherine Foot, director of longevity think-tank Phoenix Insights, said the abolition of the pensions Lifetime Allowance was “a landmark announcement for pension taxation”. It would be welcomed by those at the top of the earnings ladder close to breaching the limit. “But huge saving gaps already exist between income bands,” she said, “with over 15 million people in the UK not saving enough for retirement.”
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Gerard Grech, CEO of Tech Nation, said the budget was “a positive indication of the UK government’s commitment to becoming a science and technology superpower”. He welcomed measures aimed at supporting the UK tech industry, including the introduction of additional tax support for R&D and the announcements on an AI sandbox. “This is a critical step towards creating a distinctive, value-driven tech ecosystem,” he said.
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Mike Randall, CEO of Simply Asset Finance, said that with corporation tax set to increase next month — from 19 percent to 25 percent — businesses would still be in need of a financial lifeline. “The introduction of the Super Deduction Tax in 2021’s Budget demonstrated an intent from the government to incentivise UK business investment,” he said, “but following today’s budget it’s clear there is still more to be done.”
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The CEO of technology provider Axyon AI, Daniele Grassi, was pleased that artificial intelligence retained its support from the government. “The Chancellor’s introduction of the AI sandbox and incentives for AI research signifies the UK’s commitment to support those researching artificial intelligence,” he said. “AI can help UK investors leverage decision-making and reaffirm the country’s potential as a scientific and technological powerhouse.”
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Paul Goodman, chair of the National Association of Commercial Finance Brokers (NACFB), called for longer-term vision and the development of a UK industrial strategy. “The Chancellor’s ‘back to work’ Spring Budget has sought to address some of the acute labour concerns that the UK has faced since the pandemic,” he said, “but those returning to the workforce are likely to encounter the same systemic challenges as when they left.
“The UK is the only G7 economy which is still smaller than it was before the pandemic … there was little recognition of the continued high borrowing costs for enterprises, and the barriers that remain in their attempts to access finance.”
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Nick Nesbitt, head of medical financial planning at Mazars, said it was “a good news day” for doctors and GPs. Hunt dismissed two key drivers behind the mass exodus of GPs, doctors, surgeons, and consultants from the medical workforce, he said. “Abolishing Lifetime Allowance, and at the same time hiking the Annual Allowance to £60,000, removes almost all NHS scheme members from pension allowance tax charges. Now only the very highest earners will need to be aware of the thresholds.”
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Sheila Flavell, COO of FDM Group, welcomed childcare changes. “Rising costs place a huge strain on working parents,” she said, “forcing many women to choose between pausing their careers or paying out every penny of their net income to nannies and nursery fees. These proposals will empower women to continue and develop their careers.”
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Zara Nanu MBE, CEO of Gapsquare, agreed that the expansion of childcare was positive. “Free or subsidised day-care could make huge impacts across the country,” she said, “decreasing the gender pay-gap, increasing GDP, decreasing issues like hidden work, poverty, and the cost of having children. The move by the Chancellor today is a welcome one … But will it be enough?”
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David Ovens, joint MD of Archangels, said the reversal of cuts to the R&D tax credit regime for small businesses was a winner. “These credits will continue to play an important role as a source of cash for early stage, often loss-making, companies,” he said.
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Steve Malkin, CEO of sustainability and net-zero certifier Planet Mark, said the Chancellor’s speech hit some positive notes. “It was encouraging to hear the Chancellor class nuclear (power) as environmentally sustainable. This is a pragmatic step forward given the climate emergency we are facing. However, this must come alongside greater investment into renewables, on land and sea, if we are to secure economy-wide decarbonisation.”
There should also be greater long-term investment in helping SMEs to reduce their energy bills by reducing their emissions, he said.
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Todd Davison, MD of Purbeck Personal Guarantee Insurance, said: “We were promised a budget for growth aimed at boosting the economy by encouraging investment and removing barriers to people getting into work … However, we saw very little in the way of financial support for struggling small businesses, outside of the 12 Investment Zones announced as part of the levelling-up agenda.”
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Alan Thomas, UK CEO at insurance provider Simply Business, said small business owners were particularly vulnerable at the moment. “The Spring Budget is seen by many as an opportunity for the government to express its support for SMEs and the self-employed …
“While important measures have been put in place, such as an increase in the Annual Investment Allowance to £1m and greater support in terms of childcare provisions, the fear remains that these new measures will only scratch the surface … The three-month continuation of the Energy Price Guarantee will be welcome news, but SMEs up and down the country will still have very real concerns as to what comes after that.”
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John Auckland, founder and chair of crowdfunding marketing firm TribeFirst, said Hunt had missed an opportunity by giving no further update on changes to the Seed Enterprise Investment Scheme (SEIS) announced last Autumn. “The Chancellor failed to give any clarification on the legal and parliamentary processes required to enable those investing in qualifying companies to secure a higher allocation of tax relief.”
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Forbes Advisor’s Kevin Pratt said the decision to extend the 5p cut in fuel duty and freeze it for the next 12 months would relieve motorists. “But they’ll also be happy to see an official acknowledgement of the shocking state of Britain’s roads, with an additional £200m of funding to tackle the scourge of potholes.”
