Business news

Emergency budget summary and Chamber comments

Posted Tuesday 22 June 2010 09:00 GMT

Edinburgh Chamber of Commerce comments on George Osborne's first budget as Chancellor, with an 'at-a-glance summary' of the main points.

Chief Executive, Ron Hewitt said: "Business can live with this budget. The majority of points relevant to business are positive, and where we have regrets, we can also see the direction the Chancellor is pursuing. If as he stated, it's about prosperity for all then we all also have to share the burden.

"His underlying theme that low debt leads to low interest rates and that encourages recovery is in marked contrast to the previous government's position. If his plans are realised then eliminating structural deficit and reducing the debt burden (realistically over the lifetime of this parliament) will be very welcome.

"A two year pay freeze for higher earning public sector workers, and John Hutton to lead a Pensions review are welcome actions in line with our campaign Time for Renewal. The raising of the ERNIC limit alleviates the pressure of increases imposed by the previous government and the breaks for start-up businesses on National Insurance for their first ten employees are a worthwhile incentive. Reduction of corporation tax to 24% over four years is a move we have been after for some years, and maintaining the low rate at 20% adds to the incentivisation of investment in the private sector.

"Freezing fuel duty and working towards stabilising pump prices are just the kind of stability measures business needs. Income tax allowance increases are certainly welcome for the average employee and a reward for workers.

"Whilst it is arguable that VAT increases are fair as they tax spending decisions, I know retailers will be disappointed. But fresh income has to be found somewhere. An increased annual income of £13bn which that brings would be tempting for any Chancellor at the present time. The Capital Gains Tax increases are understandable but could be construed as disincentives, however, we are delighted that exemptions for entrepreneurial investors have been increased. Clearly banks will be disappointed with balance sheet levies.

"In weighing up the balance, the proof of the pudding will be in the eating, but we welcome the Chancellor's deferral to the Office for Budget Responsibility as giving an objective assesment of performance."

To download the Scottish Chambers of Commerce summary of the emergency budget, click here.