The British economy is in precarious straits. Pervasive uncertainty has whittled away business confidence, and there is a continued sense that dark economic clouds are gathering.
The Chancellor was therefore under pressure to deliver a comprehensive plan for growth today. But while elements of the Budget announcement are to be welcomed, the government is still yet to prove that it has a roadmap for recovery.
First, the good news. The new National Loan Guarantee Scheme, which will offer small firms cheaper credit, is to be welcomed. With cashflow tight for many firms, keeping the cost of borrowing down must be a priority. Just as important is the adoption of the EU’s new simplified tax reporting system, which will see the accounting burden significantly reduced for the smallest firms. We also welcome the announcement of new ‘enterprise loans’ for young entrepreneurs. These individuals will be the backbone of the British economy, and the government is right to support them.
But many of the Chancellor’s measures do not go far enough. Cheaper credit under the NLGS will be a boon for many firms – but it does not address the most fundamental problem that small businesses experience. Many small firms simply cannot persuade a bank to lend to them, and the NLGS will not mitigate this.
Meanwhile today’s Budget was notably low on infrastructure announcements. While improvements to railways in the north are to be welcomed, small businesses want to see more dramatic, more inventive ideas from the government. Britain’s businesses cannot thrive unless they have a world class infrastructure on which to rely.
Mr Osborne claimed that his Budget “unashamedly backs business” – and there is some good news in today’s announcement. But, while simpler accounting and slightly cheaper loans are undoubtedly good news, small firms will remain concerned that after almost two years in office, the government is still yet to deliver a comprehensive plan for growth.