Business and the budget
The big news of the week has of course been the budget. We’ve been glued to our screens to see what we can expect from the Government to help give our economy the boost it needs and the business benefits on offer.The extensions made to tax...
The extensions made to tax relief in 2012 showed the government was focusing on the right areas but for the UK’s start-up scene it just wasn’t enough. We don’t have a large market in the UK so it is essential that we make the most of both the UK market, and the global market. For starters we should focus on buying British! Secondly, as a nation of tech innovators we need the government to step in and do more in helping our start-ups engage forcefully on the world stage. This is something we are failing at right now. We have some fantastic technology businesses here, so it’s not going to be difficult for them to find success stories to champion.
In this week’s budget I wanted to see more action higher up the food chain, when it came to investing in UK businesses. It was both good news and bad news. The bad news is we’re still facing spending cuts and tax rises. The good news is that Osbourne plans to make Britain the place to raise money and invest in business.
Infrastructure spending is to be increased by £3bn a year from 2015 and corporate tax is to be reduced to 21% starting next year. As Osbourne says we can’t stand still in this global race. But whilst reducing tax will entice international businesses to set up the UK, what about the little guy? The UK start-ups and entrepreneurs? A lot of businesse are having to look at alternative investment markets to grow and this is adding an extra barrier to an already difficult process. Starting up your own business, no matter how great your idea, is hard work. So what is the Government doing to make it easier?
Well the Business Bank is to provide £75 million of new funding for venture capital to support UK start-ups. It was also hinted that the Funding For Lending scheme could be extended, enabling more start-ups to get the loans they need. Add to this the employment allowance, which according to Osbourne means some 450,000 small businesses will pay no jobs tax at all, and the UK should provide a stronger platform for new British start-ups to take off. This is providing it all comes to fruition of course.
The Government also promised to increase by fivefold the value of government procurement budgets spent through the Small Business Research Initiative. This will give more SMEs the opportunity to secure government contracts. It’s a shame there wasn’t a similar pledge for the G-Cloud. But not surprising given the technology sector wasn’t really mentioned at all in the budget.
Given the internet sector accounts for 8% of the economy, it’s not really a sector they can afford to ignore. It was only a couple of months ago that the Government pledged another £50 million of funding to Silicon Roundabout in its mission to make ‘Tech City’ one of the biggest technology centres in the world. So it seems odd it slipped under the budget’s radar.
Finally, an interesting idea was floated for a single competitive pot of funding for local enterprises. This is exactly what we need more of. We need firm legislation in place that gives the UK entrepreneur more value in the UK economy than global businesses.