Alistair Darling will deliver his Budget on 24 March 2010 at 12:30pm. We
will be running a live webcast on the day of the Budget featuring PwC
specialists sharing their views and insight. To view the webcast, visit budgetwebcast at 4.30pm on the
day of the Budget. Alternatively you can add the page to your
"Favourites" today to ensure you don't miss the webcast.
Sign
up today to receive our detailed Budget analysis following the Chancellor's
speech. You'll also receive a free notification to our live Budget webcast.
In advance of the Budget speech, PwC specialists pose some thoughts on what
may be included. In the following short video Mary Monfries, Head of Private
Business, looks at the future of UK enterprise.
Budget 2010 predictions: What’s the
future for UK enterprise?
Mary Monfries, Head of Private Business
With the Chancellor’s Budget looming on the 24th March, I have been asked well
what’s happened already in terms of Government announcements and the PBR that
affects the future of UK enterprise. It’s not gone past any body’s notice I
think that most of the press coverage has been around access to finance,
particularly for growth and early stage businesses. There’s been a lot of
announcement, I think they’ll be more to come. The thing for business is until
they see it working on the streets, how will they know if these announcements
are really working.
I think it’s a challenge for Government, it’s a challenge for government to
firstly differentiate between what are the things that are short term leads
driven by the recession in a downturn and the recovery, and what are more
longer term structural changes that are needed in terms of equity gap and
funding gaps for growth companies.
When ever I’m asked what will the 2010 Budget bring for enterprise and for
privately owned businesses, the first thing I always say because it’s crucial
is that this isn’t a part of the economy that’s looking for a crutch from
government. I have been so proud to see what businesses have been doing for
themselves to look for opportunities in this downturn, and to make themselves
more competitive going forward. But what they are looking for from Government
are a couple of really important things:
• One is stability, so they can make decisions without worrying whether the
rules are going to keep changing,
• And they are looking for fiscal competitiveness for the UK.
And as well there are some really important specific targeted reliefs for
enterprise, like R&D tax credits, like the enterprise management
incentives, like VCTs and the IFS which are really crucial.
My own view, and I have no crystal ball here, is that in the Budget the
Government will continue to support those specific enterprise reliefs where
they think they are working. My own personal view as well though is they will
keep tightening them up to make sure they are spending that money and those
incentives are really targeting in practice the policy objective of helping
growth higher risk companies.
Important question of course, will tax rates go up? I think it’s really hard
for anyone to believe that tax rates are going to go down, given the position
the economy is in. We already know about the income tax and NIC rises, and many
believe that that has come to a dangerous level in terms of attracting
international investment. But I do hope that the Government are going to, when
they are trying to balance the books, take account of those really important
things, which is the stability and the competitiveness. I think they have gone
a long way to saying that so far in the tax framework for business that they’ve
already published on the 22nd February 2010. There is some really good
principles in there, the proof of the pudding is in the eating right now in
terms of how the actions come through to align with those principles.
I always smile that there are so many people who are willing to give their view
on what they would do if they were the Chancellor in the forthcoming Budget. I
think, I’d like to say first that I think it’s an incredibly difficult job to
balance the books right now. But against that backdrop, what I personally would
be doing, having now published a tax framework for Business, a draft framework,
I would want to make sure that everything I did accorded with the six
principles that are laid out in that framework. There are some really important
thing is there like competitiveness, fairness, simplicity, and stability and
certainty. Those are so crucial that I would want everything I did, my actions
to speak those words, otherwise it loses credibility. I believe it’s so
important to business, I believe that everyone understands that it’s a tough
time now for tax rates. But keeping us competitive is not just about tax rates,
it’s about stability and people having trust in the tax system and what the
long term policy objective is.
What is the future for UK enterprise when the focus on the turmoil within
the public sector looms so large? We have already seen many measures that could
make the UK seen as a very unattractive place to do business, so how will the
Chancellor encourage growth and instil a new, much needed dynamism into this
sector of the economy?
We have seen that despite a wide range of tax reliefs available for
enterprise, many businesses are not felt supported in their growth plans and
are not incentivised to do what is required to see the necessary change in the
economy.
View Budget video transcript
Bookmark with: