With the latest inflation figure showing an increase to 4.4% and a lower amount of tax collected in February, both announced the day before the budget was due, arguably the Chancellor had little room for manoeuvre.
There were some small comforts for smaller enterprises though the bulk of George Osborne’s measures are likely to benefit big corporations the most.
Cutting fuel duty by 1p per litre, and delaying a planned 4p per litre rise to April 2012 along with scrapping the fuel duty escalator was welcome particularly to hauliers, couriers and other companies that depend heavily on transport.
Keeping personal tax at its current level and increasing the personal tax allowance next year will also moderate any pressure on wage inflation, which is in any case not great given the current uncertainty over employment.
The money for apprenticeships, the new enterprise zones, the relaxation of planning laws and the new decision deadline should also make life easier for businesses.
However, I believe most of the budget’s measures are likely to benefit larger corporations, rather than the smaller, UK-focused businesses.
Overall this is a budget that doesn’t load yet more pressure on struggling businesses but the real concern among businesses is the prospect on interest rate rises which will squeeze those who are struggling to survive and precipitate a significant increase in the number of formal insolvencies.
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