15th March 2023: Small business champion, Todd Davison, MD of Purbeck Personal Guarantee Insurance, responds to today’s Budget and the updated economic and fiscal forecasts for the next five years from the Office for Budget Responsibility (OBR). It was confirmed that inflation will halve by the end of the year and the UK will escape a ‘technical’ recession.
Todd Davison says: ”We were promised a budget for growth aimed at boosting the economy by encouraging investment and removing barriers to people getting into work. That was certainly the focus with a range of initiatives to make it easier for businesses to attract, employ and skill over 50s who have left the workplace, long-term sick and stay at home parents. The Government confirmed there are 328,000 more vacancies now than prior to the pandemic.
“However, we saw very little in the way of financial support for struggling small businesses outside of the 12 Investment Zones announced as part of the Government’s levelling up Agenda. We know that to stay afloat, 42% of small businesses have increased their prices, 31% have cut energy use, 23% have changed or extended their hours while 13% have been searching for new investment[i]. Essentially, the measures announced for small businesses in this budget will require them to spend in order to save[ii].
“It is also disappointing not to have seen additional tax incentives to focus small business investment in green technologies and sustainable investment to encourage employers to pursue outcomes which meet and contribute towards UK Plc.
“Small businesses have needed to find new levels of resilience and new ways to mitigate the risks they face. That’s part of the reason why we have seen such an upsurge (145% increase on 2021) at Purbeck in the demand for Personal Guarantee Insurance for personal guarantee backed business loans.
“Furthermore, with the rise in corporation tax, the UK may be seen as less attractive than other international locations. The budget was an opportunity for the Chancellor to mitigate this impact as far as possible and provide a corporation tax roadmap over a number of years to help businesses make planning decisions.
“This is a progressive budget in many respects but it falls short of what’s needed to keep the engine room of the U.K. economy oiled and moving.”