Darling’s debut is bland and uninspired

Mar 13 2008 Liverpool Daily Post

Tony McDonough and Alex Turner find there were no surprises in Alistair Darling’s first Budget, as they pick out the strands which will affect business

ALISTAIR DARLING’S first Budget was described as “bland” and “uninspiring” by company directors and profes- sional advisers in Merseyside.

Mr Darling talked about a number of measures during his speech, but much of the content had already been announced in the preceding months. The main measures affecting business included:

Confirmation that the new Capital Gains Tax rate of 18% will come in next month, together with entrepreneurs’ relief, offering a CGT rate of 10% on gains up to £1m;

£60m more for the small firms loan guarantee scheme, which will be extended to all small companies;

A new target to award 30% of government contracts to small firms;

Confirmation that a £30,000 charge for non-doms will come into effect from April, but no further change for this Parliament or the next;

Government to provide a capital fund of £12.5m to encourage more women entrepreneurs.

Graham Odlin, a tax partner at the Liverpool office of accountants KPMG, said there was very little in the Budget we did not know about already.

“There was very little this time for the SME sector and much of what there was had already been announced,” he said.

“The Chancellor talked about simplifying the tax regime but there is very little in terms of extra detail about how this is going to be achieved. And there is a huge amount about anti-avoidance measures and that will add further complexity. What he said in the Budget was more or less what was said in the pre-announcements last year, so it shows he has hardly listened to what business has had to say.”

Mr Odlin said there was some good news in the Budget, in particular the announcement of extra tax relief for firms undertaking research and development.

Liverpool Chamber of Commerce chief executive Jack Stopforth welcomed the drive to help small firms win Government contracts.

The Chamber already has a scheme in place that alerts members when contracts come up and can offer help with the application process.

He said: “We think this is a terrific idea, and I will have staff working on the detail right away.

“It can be a very difficult process. You often have to be on an approved tender list before you can even apply and if you’re not then you won’t get a sniff.

“The Government usually sets the bar quite high and small firms often just end up as sub-contractors to the big guys, so anything that makes it easier has to be a good thing.”

On the initiative offering extra help for women entrepreneurs, Joëlle Warren, managing director of independent executive search firm, Warren Partners, said: “Mr Darling must be commended for recognising the need to provide financial support to encourage entrepreneurism within the UK’s female population.

“It never ceases to amaze me that many more women in America have started, and continue to start, their own companies than here in Britain.

“Hopefully, this capital injection, albeit relatively small, will now focus attention on the need to encourage more women to set up their own businesses in the UK.”

tonymcdonough