Exporting was a central theme in today’s Budget as the Government continues to encourage a balanced recovery. There are sizeable gains for UK manufacturers here in particular over the next few years. On export, the Chancellor has thrown his weight behind getting more businesses exporting.
Phil Orford, Chief Executive of the Forum of Private Business, says: “This was a budget that offers some help to all levels of business, with perhaps a slight focus on the mid size energy intensive and manufacturing businesses, rather than the very small ones. However, it does help to tackle the cost of energy and makes good on the commitment trailed before the Budget to support those that look to invest, either in the UK – with a more extensive Annual Investment Allowance – or abroad, with a £3bn export support budget."
Overall, the Budget, combined with the more cost measures to help small businesses announced in the Autumn Statement, sent out a positive message to invest and grow in the year ahead.
On export, the Government said it will overhaul UK Export Finance’s (UKEF’s) direct lending programme, doubling it to £3 billion and cutting interest rates to the lowest permitted levels to provide competitive financing that helps UK firms win contracts and expand overseas.
On apprenticeships, the Government said that the AGE grant will be extended to December 2015 to support 100,000 additional apprenticeship programmes and from January 2015 the AGE grant will be exclusively for small employers (fewer than 50 employees).
"This was a central ask of our budget submission- ensuring small businesses have the skills they need is essential to creating sustainable growth. Small businesses’ access to apprenticeship programmes must continue to remain at the forefront of the Government’s mind as it proceeds with its programme of apprenticeship reform," says Mr Orford.
On R&D Tax Credits, the Government announced that from April 2014 it will increase the rate of the payable credit to loss makers from 11 per cent to 14.5 per cent. A loss making SME investing £100,000 in qualifying R&D will be able to claim a cash payment of £32,600- £7,800 more than under the existing scheme.
On infrastructure, the Government announced an additional £140m of new funding will be made available for damaged flood defences, a £200m competitive fund will be made available for local authorities across the UK to bid for funding to repair roads, targeted support has been made available for specific areas (Mersey Gateway, Welsh Government is allowed to use existing borrowing powers to invest in the M4), some start-up support will be made available through the Regional Air Connectivity Fund for new routes at smaller regional airports and the Government has commissioned HS2 Ltd to develop proposals for accelerating the project and opening the line to Crewe by 2027 (six years earlier than planned).
The Government also announced it will support businesses across the UK to invest and expand by doubling the annual investment allowance to £500,000 until the end of 2015.
"We are a long way from the early years of the Chancellor’s reign, when the Annual Investment Allowance was reduced to £25,000. We are overwhelmingly supportive of the doubling of the current rate to £500,000, as well as its extension, which will help any small business looking to invest. Over half of Forum of Private Business members have targeted 2014 for growth and this allowance will help support them to invest for that,” says Phil.
The Government stated it will reduce business energy costs to ensure that the UK remains a competitive location for manufacturing, including capping the Carbon Price Support rate at £18 from 2016–17 to 2019–20 and providing targeted support to energy intensive industries.
In addition, the Government announced it will make permanent the SEED Enterprise Investment Scheme.
“The Seed EIS scheme has helped well over a thousand early stage businesses to date and we welcome the scheme being put on a permanent basis. It is important that further sources of finance are clearly signposted as businesses outgrow the finance available through this scheme,” Phil remarks.
The Government also announced better banking for businesses through opening up SME credit data to challenger banks and other finance providers, a new consultation on legislating to help match SMEs who are turned down for a loan with alternative lenders and changes to the issue of Deeds of Priority.
