Chancellor John Healey has been accused of failing to deliver on his promise to tackle the cost of business with a "hodgepodge" Budget that focused on supporting small firms, levied taxes on banks and bookmakers, and introduced stealth tweaks that risk complicating the tax system. While the Treasury issued supportive quotes from business stakeholders including Sage, Octopus Ventures and Barratt Redrow, other leaders said the package fell short. Rain Newton-Smith, chief executive of the CBI, said Healey's red box "lacks the bold moves that would have made it easier for firms to invest, hire and grow", while Helen Miller, director of the Institute for Fiscal Studies, called it "a hodgepodge of tax increases and cuts".
Despite employment and energy costs being the biggest burdens on businesses, Healey pressed ahead with increases to the minimum and living wage and offered little new support beyond extending fuel duty cuts and increasing mileage rates. The moves came as the Budget watchdog judged Labour's Employment Rights Act to have a "negative impact" on the economy.
Banks became the biggest industry targeted by the Treasury. The surcharge on banks will double from 3 per cent to 6 per cent, raising £1.47bn over a time-limited period of 15 months. JPMorgan criticised the move as lacking "principle", though the Wall Street bank, whose boss Jamie Dimon had threatened to pull plans for its £3bn tower in Canary Wharf, said it remained committed to the UK. Shares in Barclays, NatWest and Lloyds Banking Group rose, as investors expressed relief that the tax hit was not as high as the 8 per cent feared.
Healey also took aim at gambling, announcing a smaller increase in machine gaming duty from 20 per cent to 25 per cent, despite a push within Labour for a 40 per cent increase. Shares in Entain, which owns Ladbrokes, closed 3.65 per cent higher, while boss Stella David said the company would have to "fully mitigate" £25mn in extra costs with shop closures.
Source: Financial Times Companies · Summarized by HeadlinesBriefing