Solid benefits – but no real incentive for job creationMar 24, 2011
Many of the changes will provide solid benefits for business growth and employment. The creation of 50,000 apprenticeships, greater controls on fuel prices, the extension of Small Business Rate Relief and benefits connected with research and development and enterprise investment are all positive, they say.
However, the Federation of Small Businesses remains concerned about new employment laws due to come into force this year and the failure to extend the National Insurance Contributions holiday to existing businesses that will be looking to recruit more staff.
The Budget does not go far enough to provide a real incentive for job creation, it says.
The FSB is pleased that the government has decided not only to scrap the 1p increase in fuel duty and the fuel duty escalator, but also to reduce fuel duty from today. This will help to tackle inflation, its members believe.
It has welcomed the creation of 21 new Enterprise Zones across the UK, the cut in corporation tax, the creation of an extra 50,000 apprenticeships and the three-year moratorium on new regulations for the smallest businesses.
A FSB spokesman said: “This will give the smallest firms the confidence to employ more staff without having to worry about constant changes in employment law.
“However, the government needs to look at extending this to all small firms if they wish to open up an environment for businesses to take on significantly more staff.”
The extension of the Enterprise Investment Scheme and the doubling of Entrepreneurs’ Relief to £10 million will provide a shot in the arm for entrepreneurship in the UK. Small businesses are key to innovation and the 200% increase in SME R&D tax credit is welcomed.
FSB Luton and South Beds branch chair Carole Hegley said: "The Chancellor has said that this Budget would be a ‘Budget for Growth’ and in part that is what we are seeing – however, there are vital components missing for small firms to create jobs.
"We are pleased that the Chancellor has introduced a fuel duty stabiliser, has committed to cutting fuel duty and has introduced 21 new Enterprise Zones. This will provide much needed stability for small businesses.
North Bucks branch chair Allan Banks added: "The government has committed to cutting red tape but we believe new employment laws will still come into force in this year, which could hinder businesses from taking on staff.
“The biggest opportunity missing from this Budget is the failure to extend the NICs holiday to existing businesses, which would really have provided an incentive for small firms to take on more staff."