ChamberPolicy
Budget 2014, what the Secretary says At a Herts Chamber Business Leaders’ breakfast on 28 March to meet the Exchequer Secretary to the Treasury, David Gauke MP (South West Hertfordshire), and to hear what he had to say of the Budget, Mr Gauke said that the Government’s most pressing commitment was deficit reduction.
At the breakfast, sponsored by Lookers Lexus Hatfield, he said that there were three points to make. Firstly, the Treasury ambition to halve the deficit by 2015 led to the decision to produce a fiscally neutral budget, and sticking to the 2010 Plan A — that is, tackling the deficit to avoid soaring interest rates. Secondly, the Budget recognised the SME and large business contributions to the sustained recovery of the economy, which is why corporate tax was reduced from 28 to 23 to 21 per cent (2014) with a proposed further percentage point reduction in 2015 to align with the G20 rate. This was particularly important to help Britain’s intellectual property competitiveness. On business taxation, he said that there were a number of issues needing urgent attention, the
first of which was taxation reform relating to foreign companies. But in the mean time, for SMEs, a growing and major part of the economy, he said the Treasury wanted to make research and development (R&D) tax credits more attractive for initially loss-making SMEs, which would be good for start-ups. The employment allowance of £2,000 against SME’s national insurance contributions (NICs) aims to boost job creation. There was a £1,000 rebate relief for retailers and a £4.9m, equating to a 100 per cent, relief on plant and machinery to motivate further investment. To help the competitiveness of energy-intensive businesses in the UK, the Carbon Price Support rates would be frozen, and for exporters, there was additional export finance support. He said “We don’t manufacture as much as we should do. We don’t export as much as we
should do, and we don’t save as much as we should do.” The third point Mr Gauke made was on pension reform and savings. The Budget endows ISAs with greater flexibility and abolishes 10 per cent savers rate to help those earning less than £15,500. On pensions, he said radical reform was required and that it was right to give people power over their assets. In summing up, the Exchequer Secretary said it was right to encourage businesses outside the UK to choose this country for investment, and to bring their business here. On inflation, employment and growth, he said the country is moving in the right direction, and all part of the long-term plan, which is to put in place the right conditions for business to grow — to stimulate enterprise and entrepreneurship.
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