Knowledge Centre
9th December 2009
Business groups have returned a mixed verdict on the chancellor's Pre-Budget Report; praising the extension of financing support to small firms, while warning that National Insurance hikes will stifle job creation.
Alistair Darling announced a year's extension of the Enterprise Finance Guarantee scheme - identified as key by the Federation of Small Businesses (FSB) - through which the Government guarantees 75% of loans made to small firms with a turnover of less than £25 million.
The news that a 1p rise in small companies' Corporation Tax has been postponed until April 2011 is also a boon for firms, the FSB said. Its national chairman John Wright praised the lowering of corporation tax - from 28% to 10% - on profits derived from patents as good news for innovative businesses.
However, the chancellor has come under fire over his decision to hike employers' NI contributions by an extra 0.5% in 2011.
CBI director-general Richard Lambert said that the chancellor had made "a serious mistake" by unveiling "an extra tax on jobs" in a climate of weak economic and employment prospects, predicting that job creation as well as growth would suffer as a result.
And John Wright described the action as a short-sighted "attack on jobs".
"While unemployment continues to rise, it is unaccountable that the Government hasn't considered a new approach, such as a National Insurance rebate for new jobs in small firms," he added.
Meanwhile, the chancellor's announcement was dismissed by Alan Downey, head of public sector at professional services provider KPMG, as "clearly a pre-election view of the world which will need to be revisited immediately after the election". He characterised the axe that was expected to fall on public sector spending as turning out to be more of a "butter knife".
IMAGE David Bebber/The Times/PA
Pre-Budget Report is mixed bag, say business groups
Alistair Darling announced a year's extension of the Enterprise Finance Guarantee scheme - identified as key by the Federation of Small Businesses (FSB) - through which the Government guarantees 75% of loans made to small firms with a turnover of less than £25 million.
The news that a 1p rise in small companies' Corporation Tax has been postponed until April 2011 is also a boon for firms, the FSB said. Its national chairman John Wright praised the lowering of corporation tax - from 28% to 10% - on profits derived from patents as good news for innovative businesses.
However, the chancellor has come under fire over his decision to hike employers' NI contributions by an extra 0.5% in 2011.
CBI director-general Richard Lambert said that the chancellor had made "a serious mistake" by unveiling "an extra tax on jobs" in a climate of weak economic and employment prospects, predicting that job creation as well as growth would suffer as a result.
And John Wright described the action as a short-sighted "attack on jobs".
"While unemployment continues to rise, it is unaccountable that the Government hasn't considered a new approach, such as a National Insurance rebate for new jobs in small firms," he added.
Meanwhile, the chancellor's announcement was dismissed by Alan Downey, head of public sector at professional services provider KPMG, as "clearly a pre-election view of the world which will need to be revisited immediately after the election". He characterised the axe that was expected to fall on public sector spending as turning out to be more of a "butter knife".
IMAGE David Bebber/The Times/PA
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