Richard Lambert, CBI Director-General
"With the election just weeks away, this was a clever, political Budget. However, anxiety remains on how the deficit is going to be paid down, and the growth forecasts for 2011 and beyond are still on the optimistic side.
"There was more support for business than might have been expected, with a series of modest but helpful changes. The doubling of entrepreneurs" CGT relief will help investment in small businesses and the extra money for science places at university will be welcomed by industry. However, it is the fiscal decisions over the next 12 months that will really determine the UK"s economic future."
Centre for Economics and Business Research
Related LinksDarling"s plan: at-a-glance guideDarling targets the rich before electionLive debate: Deconstruct the Budget with our expertsChancellor Darlings last Budget before an expected general election in May allowed the Government to unleash some good news on the public finances in the largest downward revisions to projected borrowing as a share of output since the 2000 Budget. However, on the whole, the projections for growth are still too bullish and this has clear implications for the deficit reduction plan. We think 35 billion extra fiscal tightening will be needed.
Better than expected tax receipts in recent months resulted in the Chancellor being able to announce that public sector borrowing will come in at 167 billion in 2009-10. This compared with 175 billion projected in last years Budget and 178 billion in the Pre-Budget Report. Compared to the estimate in the Pre-Budget Report, borrowing came in 11 billion lower than expected; equivalent to some 0.8 percentage points less as a share of GDP. In addition, the Chancellor expects the borrowing to be some 100 billion lower than previously projected over the period to 2014-15.
Derek Simpson, Unite joint general secretary
"The starting whistle for the election has been blown and it"s 1-0 to Labour. The last Budget before the election shows leadership and responsibility during difficult times. Alistair Darling has focused on support for the young, growth, investment and jobs when Tory doom-mongers, who spend their time talking Britain down, would rather slash and burn our public services and leave working families to sink or swim.
"The establishment of a green investment bank is welcome, it will support British manufacturing when the Tories don"t even have an industrial policy."
Nick Clegg, leader of the Liberal Democrats
This Budget was a political dodge, not an economic plan. Britain needed a Budget that gave us honesty in spending and fairness in tax. We have got neither. Labour is in denial, while the Conservatives are talking tough to cover up that they only offer more of the same. The Chancellor is incapable of coming clean about where spending cuts will have to fall.
Rather than being honest with people about what the Government can and cannot afford, the Chancellor would rather let others indiscriminately shave departmental budgets. By confirming the freeze in personal allowances the Government has ensured everyone will see a real increase in their income tax bill when what people on low and middle incomes desperately need is an income tax cut. Rather than forcing the nationalised banks to lend to good British businesses they have chosen to create a feeble quango to arbitrate between bullying banks and their small-business clients. It says something when the most substantive announcement the Government can come up with is a tax agreement with Belize, however welcome that may be.
Federation of Small Businesses
The FSB welcomed help for small businesses but is disappointed that the Chancellor is proceeding with the proposed hike in national insurance contributions (NICs).
The FSB was pleased with the announcement to take 345,000 small businesses in England out of the business rates system. Business rates are the third-highest outlay for small businesses, and this proposal will come as a huge relief to small businesses on the high street. This measure comes after a concerted FSB campaign to help businesses and local communities.
Sir James Dyson
"These steps do not go far enough. To rebalance the UK economy, we need to invest more in science and engineering. We need to harness the UKs innate engineering expertise to remain globally competitive or we will be in danger of slipping behind the chasing pack. This requires long-term, sustained investment in our education system and greater benefits for SMEs and entrepreneurs."
Andy Atkins, Friends of the Earth executive director
"The Government"s announcement to set up a green investment bank is fantastic news it should be a crucial building block in the creation of a safe, clean and prosperous future. This bank will provide crucial funds for major green developments, such as offshore wind projects, which will slash emissions, increase our energy security and create thousands of new jobs.
"We must do much more to build a low-carbon economy, but today"s announcement is a massive stride in the right direction."
Howard Archer, chief European UK economist, IHS Global Insight
The Chancellor"s growth forecasts still look more than a little optimistic. Forecast GDP growth of 1.0 to 1.5 per cent in 2010 is realistic, but expansion of 3.0 to 3.5 per cent in 2011 seems very hopeful even though this has actually been trimmed from 3.25 to 3.75 per cent. Furthermore, we have serious doubts that the economy can grow by 3.25 to 3.75 per cent in 2012 and thereafter. It really is hard to see where growth of this magnitude will come from, given the fiscal squeeze that will have to come.
Even though the Treasury bases its public finance forecasts on the bottom of these growth ranges, the fact remains that the plan for bringing down the Public Sector Borrowing Requirement to a modestly lower than previously projected 89 billion in 2013-14 depends appreciably on highly questionable robust economic activity both in 2012 and the following three years.
Meanwhile, our initial view of the Budget is that it is far more full of political rhetoric and looking to draw political lines ahead of the election than it is on major economic developments. The Chancellor has once again looked to make political capital out of the claim that the Government"s stimulus measures stopped the recession being deeper, and that tightening fiscal policy sooner would risk throttling a still fragile recovery in its infancy.
Michael Izza, chief executive of the ICAEW
UK businesses have played their part in helping get the UK economy through the downturn by maintaining employment and revenues. However, they also need certainty and confidence in the recovery.
Whilst the focus on jobs and investment is important in the short term, businesses will want to know more about what they can expect in the medium to long term. They need greater clarity on how departmental spending is going to be cut and also if taxes are going to be raised. This will have a direct influence on their plans to invest and grow.
Chris Sanger, head of tax policy for Ernst Young
"The Chancellor has preserved the option of leaving good news for Labours general election manifesto, which increases the chance of a further Budget after the election, even if Labour were to be re-elected. Todays announcements represented the continuation of themes from last Decembers Pre-Budget Report, focused primarily on fixing the public finances rather than attention-grabbing giveaways.
"Where the Chancellor did spend some money was on tax credits, the investment allowance for businesses, and measures to help entrepreneurs, but he was clearly limited by Britains record deficit. In what will almost certainly be his last Budget, Alistair Darling clearly wanted to go down in history as the prudent Chancellor."
Mark Clare, chief executive of Barratt Developments, on stamp duty
Eighty-seven per cent of our customers pay 250,000 or less for their homes. We are pleased that many of them will now have the opportunity to save thousands of pounds, thanks to this measure which will help strengthen the housing market.
Melanie Bien, director of independent mortgage broker Savills Private Finance, on stamp duty
We welcome the doubling of the stamp duty threshold for first-time buyers to 250,000, which should make a significant difference to the majority, who are struggling to get on the housing ladder. But while every little helps, they still need to raise a sizeable deposit to buy their first home. Raising the top rate to 5 per cent over 1 million to fund this tax break simply underlines just how unfair the stamp duty system is because it is not tiered. A root-and-branch reform to make it fairer remains long overdue. It is at the top end of the market where the majority of transactions have been taking place, supporting the housing market. This may make homeowners think twice before moving.
Steve Radley, EEF director of policy
Manufacturers will be relieved that the Chancellor resisted the temptation to announce extra spending ahead of the election. Neither manufacturers nor the markets were expecting one today but a plan for fixing the public finances is still urgently needed. Some measures such as the green investment bank show that the Chancellor has not taken his eye off the medium-term needs of the economy. However, frequent changes to the taxes, such as those to investment incentives, compound the view that the tax system lacks direction and predictability.
James Lowman, chief executive of the Association of Convenience Stores
Action on business rates is absolutely key to helping the recovery in high streets throughout the country, but the proposal to extend small-business rate relief will not go far enough. Many local shops operate from premises that are well above the thresholds that entitle them to the benefit the Chancellor has announced. He should have gone further to make the rate relief automatic for all those entitled and to increase the thresholds to ensure that more local shops would benefit.
Daniel Torras, Managing Director of Japan Tobacco International UK
HM Treasury already loses about 3 billion each year in tax revenue to smugglers, and has lost up to 38 billion since 2000/1 to smugglers and crossborder shoppers, the size of the annual UK defence budget. This tax rise is further good news for criminals who already view the UK as a smugglers" paradise and do not care what age their customers are."
Nick Anstee, the Lord Mayor of the City of London, on the bank tax and public spending commitments
The financial services industry makes a huge contribution to the UK economy, generating 12.1 per cent of total tax revenues in 2008-09 and employing more than one million people across the UK. That is why it is sensible that the Chancellor has announced he will only pursue a bank tax with international agreement and international application unilateral action could be particularly damaging to a country with such a large financial services industry.
However, as always, the devil will be in the detail. The International Monetary Fund"s report next month will play a crucial role in outlining what format a global tax on banks could take. The potential impact of such a measure must be carefully assessed given the fragile nature of the global economic recovery."
Christopher Ogden, chief executive of the Tobacco Manufacturers Association
On January 1, 2010, the Government imposed the largest tax increase on tobacco products in ten years and now, less than three months later, taxes are to rise again. We question why HM Treasury would impose a substantial increase in such a short period, when latest HM Revenue Customs figures show that up to 24 per cent of the cigarette market, and 63 per cent of the handrolling market still avoids UK duty, costing the Treasury as much as 11 million per day in lost revenue. Todays announcement will only provide further stimulus to those who seek to profit from the illicit trade in tobacco."
Kerrie Kelly, director-general of the ABI
We are relieved that this Budget did not contain any further harmful changes to pension saving, given the damaging and overcomplicated reductions in tax relief that will come into effect in 2011. This recession has seen people pay off debt rather than start to save, but the Government now needs to introduce real measures to encourage a savings culture. The commitment to increasing the ISA limit by inflation is useful and we also welcome the freezing of CGT, which benefits holders of mutual funds. But these measures will only help existing savers when the UKs principal challenge is to increase the number of people saving and the amount they are prepared to put aside.
With ABI research proving that confidence in saving has fallen over the last year, we need urgent action, which we did not get, to promote saving and ensure any economic recovery is built on strong foundations of good personal financial habits. This was a missed opportunity to help global businesses operating in the UK."
Simon Healy, Aldermore head of savings, on ISAs
"The Chancellor"s decision to increase ISA limits in line with inflation is a welcome shift in government policy which recognises the difficulties millions of savers are experiencing in a low-interest-rate environment. ISAs are the cornerstone of many people"s savings plans and today"s announcement means they can continue to invest in ISAs safe in the knowledge that they will provide tax-free benefits for many years to come.
David Smith, senior partner at property consultants Carter Jonas, on the stamp duty
"While the property market welcomes any help at the moment, and scrapping stamp duty [on properties up to 250,000] will certainly assist first-time buyers and stimulate the market in the short term, what happens when the stamp duty holiday ends?"
Peter Gerrard, of Moneyextra.com, on plans to extend bank account access to all
"It"s imperative that the Government helps those excluded from opening bank accounts, whilst remembering that it"s their responsibility to ensure the banks do this in a responsible and transparent manner."
Matthew Elliott, chief executive of the TaxPayers" Alliance
"The Chancellor has utterly failed to face up to the horrific scale of Government borrowing and debt. There was a handful of tax holidays and spending cuts, but nothing to deal with the debt addiction which threatens to make Britain the next Greece. The public are crying out for serious and sizeable spending cuts to rebalance the books, but the Government is living in La-La Land. Large spending cuts are essential for taxpayers and for the health of the economy, but Gordon Brown only knows how to spend more, not less. We need a real Budget after the election that faces up to the serious realities of our situation."
David Frost, director-general of the British Chambers of Commerce
After two years of economic downturn, the Chancellor has clearly recognised the need to place business at the heart of this Budget. Doubling the annual investment allowance, help with business rates and allowing entrepreneurs to keep more of their gains will prove especially popular. The Chancellor could have done more to set out a clear plan for the reduction of the budget deficit, which continues to threaten business confidence and investment.
Chris Noon, partner with Hymans Robertson, on the limitation of tax relief on pension contributions remaining the same
Sticking with the status quo on tax-relief on pension contributions for high earners was the wrong move. The proposals as outlined from April 2011 make no sense on so many levels, not least the taxable income cliff that will exist above 130,000. Paying up to 80 per cent tax on pension accrual will just force senior employees out of pension plans.
Joanne Segars, chief executive of the National Association of Pension Funds
This is a Budget which is a glass half full and a glass half empty for workplace pensions. We are pleased the Government has responded to NAPF pressure to skew gilt issuance to the long-dated and index-linked end. This will help pension funds reduce their deficits, scheme sponsors reduce their liabilities and is good news for all those saving into a pension. However, the Government should have gone further and abandoned its damaging pensions tax plans for higher earners which will only serve to weaken pension provision for all. The NAPF has put forward a fairer, simpler and more workable alternative. There is still time for the Government to reconsider and we urge it to do so.
Julie Patterson, director of authorised funds and tax for the Investment Management Association
"We welcome this news. The amendment of Schedule 19 SDRT [stamp duty reserve tax] will remove a current unfairness. This, coupled with the introduction of tax-transparent contractual funds, will enable the UK to compete as a domicile for the new UCITS master-feeder structures and for hedge funds coming onshore. It follows on from improvements to the UK"s fund tax regime that IMA has secured over the past few years, including certainty that funds will be treated as investing, not trading, tax-efficient regimes for securities and property funds, and a workable regime for institutional funds. The more funds that chose to domicile here rather than offshore, the more business and employment taxes are received by the UK Exchequer. Today"s announcements are therefore good news for the competitiveness of the UK funds industry and for the UK."
Schellion Horn, telecoms director for Deloitte, the business advisory firm, on Landline Duty
The Landline Duty leads to 50p per month being charged all copper lines, residential included, but low-income households will be exempted from the levy. It will be charged and collected by the fixed-line operator, passed to Ofcom, which will then be put in the Next Generation Fund. This is expected to raise 175 million per annum."
David Brookes, tax partner of BDO
One of the Chancellors key themes in todays Budget was very clearly fairness. He has introduced several measures that will help those less well off, and heaped the pressure on those better off. The Chancellors change to CGT [capital gains tax] was an unexpected but a welcome change. The 2 billion raised from the bank bonus tax could have been used to pay off some of the countrys deficit but instead he has ploughed it, and more, into a growth package for smaller companies."
Liz Peace, chief executive of the British Property Foundation
Refinancing by the Reits has shown strong confidence in the sector and many are now assessing opportunities for new investment. Allowing Reits to have greater flexibility over how they manage their cash will benefit our economy as we begin to see improvements in occupier demand.
Ian Godden, chairman of ADS, an aerospace, defence and security organisation
We welcome the Chancellors focus on recovering from recession and investing in our industrial future, especially his focus on encouraging exports, supporting trade and discouraging protectionism as well as his warm words for advanced manufacturing, especially aerospace. His recognition that economic growth is the key to our recovery and reducing borrowing is encouraging, and the sectors that we represent can deliver the goods in this regard.
Peter Madden, chief executive of Forum for the Future, a sustainable development organisation
"Our future prosperity relies on making a rapid transition to a low-carbon economy, so a green investment bank is long overdue. We need to get this up and running as soon as possible to help Britain emerge from the recession and create the new jobs and businesses of the future."
Sebastien Lahtinen, co-founder of thinkbroadband.com
Despite confirming the landline duty to roll out superfast broadband to all corners of the UK, the devil is always in the detail. "The Prime Minister made references in a speech on Monday to 100 per cent next-generation broadband coverage, so we are disappointed that the Budget has simply repeated the Government"s previous target of 90 per cent coverage by 2017."
Mark Hunter, chief executive of Molson Coors (UK)
"Molson Coors (UK) is disappointed that the Government has chosen to, once again, increase duty on beer. One of life"s simple pleasures is sharing a beer responsibly and socially with friends at home or in the local pub, and we believe this is fundamental to maintaining a healthy respect for alcohol. We do not want to see this disappearing for the relatively small gains this tax will make for the Treasury.
Stephen Robertson, director-general of the British Retail Consortium
Reviving consumer confidence is the route to growth and jobs. Thank goodness no new tax rises were announced. But customers needed to hear a convincing plan for bringing the public finances under control. The Chancellor offered no reassurance that he understands spending cuts must be the key means to tackling the deficit and not tax rises which will wreck recovery. We heard indications that the Government is prepared to cut but, when we see the detail, it will need to be convincing."
Chas Roy-Chowdhury, head of taxation, ACCA
With an election approaching in a few weeks" time, there is every chance that todays proposals could be overridden depending on the election outcome. With the Finance Bill to be presented as soon as April 1, straight after a full-length Budget, there are serious questions about the transparency, openness, and democratic nature of this process."
Michael Coogan, CML director-general
"The Budget offers a modest potential boost to the housing and mortgage market in terms of reducing transaction costs for first-time buyers, and potentially improving efficiencies for lenders. But as always the devil is in the detail, and the detail is confused. The stamp duty concession in particular looks like a tax loophole waiting to happen."
Michael Wistow, head of tax, Berwin Leighton Paisner
"We believe that the City will welcome many of the Chancellors announcements, such as his confirmation that the level of capital gains tax will remain unchanged and the decision to double the amount of entrepreneurs" relief. However, the Budget did little to reassure those businesses and individuals who are currently giving serious consideration to relocating overseas."
Colin Stanbridge, chief executive of the London Chamber of Commerce and Industry
There was some good news for the business community with measures to cut business rates, increases in public sector contracts for small firms and the doubling of the annual investment allowance. But many company owners will feel that the Government is giving with one hand and taking away with the other as the Chancellor refused to back down on National Insurance rises, which will hit business hard.
The decision to stick with the 50p tax for high earners was a disappointment for London, if not a surprise. The Government must reduce the deficit to reassure international investors and ensure the long-term sustainability of the UK economy, but increasing business taxes is not the way to do it."
Brian Madderson, chairman of RMI Petrol
"The Chancellor failed to mention that, in addition to the 1.0 ppl duty increase from 1 April, he has already taken measures to claw back a duty incentive provided to the refiners for biofuels production. This latter measure will result in an increase to the cost of product by up to 1.0 ppl also from April 1. Thus the real increase to the motorist at the pump will be 2.0 ppl plus the VAT multiplier equating."
Simon Walker, partner in the law firm Taylor Wessing, on plans for a green investment bank
This move should be applauded by companies, venture capitalists and all Britons alike. The fact is that even if the capital markets were functioning as they were prior to the banking collapse, it is unlikely that they could provide sufficient funding to enable Britain to reach the various ambitious targets that have been set to reduce carbon emissions. A new, 2 billion source of finance will go a long way to addressing this equity gap.
Lisa Macpherson, PKF national director of tax
The tax breaks for small businesses are clearly politically motivated and designed to neutralise the opposition parties appeals to SMEs. However, they will only offer a short-term boost to growing businesses; for example, the reduction in business rates is valuable, but only lasts for one year. The real worry is that any financial advantage will be more than wiped out by increases in NIC in 2011-12."
Bob Crow, RMT general secretary
There is no doubt that the attempt to bind public sector workers in to a 1 per cent annual pay ceiling, regardless of inflation, will lead to more anger and more industrial action. Alistair Darling has doled out the same old austerity for the working class while the boardrooms creak under the weight of bonuses and dividends. If you want to see where the political elite are hell bent on dragging us after the election is over, you need look no further than the streets of Athens.
Edward Rimmer, UK chief executive of Bibby Financial Services
Darlings list of four measures designed to support small and medium-sized businesses simply doesnt add up. Nor does the package go far enough to help UK businesses play their part in driving economic growth.
Paul Cooper, Grant Thornton tax partner
"Rather than raising capital gains tax rates (CGT) as expected by many, the Chancellor announced an increase in entrepreneurs" relief from 1 million to 2 million. This means that entrepreneurs selling their businesses and qualifying for the relief should only pay 10 per cent CGT on their first 2 million of gains, saving them up to 160,000 of tax as compared to 80,000 previously."
John Philpott, chief economic adviser of the CIPD
This Budget is as bullish as the Chancellor could realistically get away, although it hardly amounts to Alistair in Wonderland. While becoming a bit more cautious on economic growth in the near term, Mr Darling nonetheless presents a slightly more optimistic outlook for public borrowing. Despite this, however, he was unable to offer much in the way of surprise tax or spending giveaways, deciding instead to spread limited funds across a range of small initiatives, mostly targeted at the young unemployed and small businesses."
Julian Hunt, Food and Drink Federation
The Government is showing it is serious about tackling unnecessary red tape with a pledge to table a forward programme of proposed regulation in the new parliament; clear targets to reduce the burdens on industry; and a commitment to work more closely with the EU institutions to improve regulatory processes in Brussels. We will be holding Government to these promises."
Miles Templeman, IoD director-general
The Chancellor"s GDP forecasts are too optimistic and there is still no sign of a credible deficit reduction plan, so while we certainly welcome the specific measures to support small and medium-sized businesses, we need to hear a lot more from the Government on debt reduction.
We remain convinced that swift action to tackle the budget deficit is needed. This means making significant spending cuts in 2010 rather than delaying commencement until 2011. The argument that early cuts would jeopardise the recovery is mistaken. We believe that lower spending would have triggered a whole series of positive developments to assist growth.
Roger Bootle, economic adviser to Deloitte
"This was a clever Budget which made the most of very difficult circumstances. The Chancellor largely avoided the temptation to bribe the voters with their own money. There was a package of tax cuts and spending increases amounting to about 2.8 billion in 2010-11, but these were partly offset by various tax rises, leaving only a modest giveaway of 1.4 billion."
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