Businesses give warm welcome to budget plans

Business leaders have generally welcomed Chancellor of the Exchequer Rishi Sunak's proposals for an ambitious infrastructure programme over the next five years and a more immediate response to the coronavirus outbreak.

The Bank of England in the background with a London city bus

David Sapsted

11 March 2020

Institute of Directors: "Efforts to ramp up R&D will be crucial to help businesses"

Jonathan Geldart, director-general of the Institute of Directors, said that, in the circumstances, the chancellor had to be bold and that "he came through for business today".Mr Geldart said that, with the coronavirus outbreak threatening a cashflow crunch, measures to cut costs and support loans to businesses were "on the money".He added, "Wider reliefs around business rates and job taxes will also buoy firms as they look to weather COVID-19’s implications.“The chancellor is going ‘all-in’ on infrastructure. Directors have long been crying out for transport and digital upgrades, but this doesn’t mean there can be a blank cheque. The question now is how we translate that money into real improvements for local economies."Efforts to ramp up R&D will be crucial to help businesses reset for the long-term challenges ahead. The other key component needed to future-proof our economy, skills, is moving in the right direction but still needs development."Mr Geldart said that while there was a necessary focus on coronavirus, it did not mean other challenges had gone away, with the costs of Brexit adjustment still very real. However, measures in the Budget to help firms with Brexit were notable by their absence."Without a genuine implementation period, companies cannot hope to be ready on their own for changes they can’t yet see, particularly with all attention currently on coronavirus," he said.

TheCityUK welcomes the £30 to fight coronavirus

Miles Celic, CEO of the financial services lobby group TheCityUK, welcomed the £30 billion package in the fight against the the virus, as well as the Bank of England's earlier interest rate cut."It is vital that confidence and economic activity are supported, people‘s health protected, and the public reassured. Using the UK’s example, the government should now intensify efforts for a coordinated international response," he said.“The measures on infrastructure are to be commended. Our country is long overdue for an infrastructure upgrade, and today the government has committed to pushing necessary projects through. Our industry will be critical to financing this investment, supporting the long-term investment in the future the UK needs."The chancellor is right to focus on boosting interconnectivity between our dynamic regional and national centres – helping companies to continue to grow their operations in centres right across the country.“We look forward to further detail and policy proposals in the months ahead for the long term role of financial and related professional services as a driver of the UK’s success and competitiveness.”

London Chamber of Commerce and Industry welcomes infrastructure commitment

Richard Burge, chief executive of London Chamber of Commerce and Industry, said that businesses would be pleased to see the chancellor had announced a pragmatic range of measures, especially on business rates relief, which would help to take the pressure off cashflow concerns during the detrimental economic impact of coronavirus.“It’s also welcome to see the Government’s commitment to investing in the infrastructure of regions right across the UK, as to fully maximise the opportunities of 'Global Britain' we need all regions flourishing and working harmoniously," he said.“The capital’s businesses will now be looking to the Spending Review for infrastructure investment that ensures that levelling up the UK doesn’t mean London falls back – as its global economy is key to driving the UK’s post-Brexit future.”

Make UK: "industry will welcome the resources devoted to improving links across the UK"

Stephen Phipson, chief executive of the manufacturers' organisation Make UK, described the Budget as a "realistic and pragmatic statement that recognises the unparalleled times in which we are living".He said that businesses understood that dealing with the impact of coronavirus was always going to be the chancellor’s priority and offered him firms' full support in doing whatever is necessary to protect the public and the economy.Mr Phipson added, “Aside from the overwhelming immediate priority, the chancellor has also recognised the need to turbocharge investment in long-term measures which will boost the productive potential of the economy and support green growth."For too long the UK’s infrastructure outside the South East has played second fiddle and industry will welcome the resources devoted to improving links across the UK, in particular the strategic road network.“In a world which is rapidly becoming digital the UK needs to stay at the forefront of research and innovation. Today’s measures to boost R&D will be applauded by industry and will help the UK lead in the technologies of the future.”

Federation of Small Businesses: this is a pro-small business budget

Mike Cherry, national chairman of the Federation of Small Businesses (FSB), said it was a pro-small business Budget. “Covering the cost of Statutory Sick Pay and emergency measures for the self-employed are particularly welcome," he said."There may need to be further steps in the weeks and months ahead. The Bank of England funding package means that there are no excuses for banks not to help, when a small business customer is in distress."“This has been a deliberately pro-small business first budget for the chancellor. We hope it is the start of things to come.”

Pantheon Macroeconomics: Chancellor's response to COVID-19 improves chances the UK economy will rebound in Q2

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, estimated that the Budget spending plans could see public sector borrowing jumping to about 3% of GDP this year.But he added, "Chancellor Sunak’s 'temporary, timely and targeted' fiscal response to the COVID-19 outbreak won’t prevent GDP from falling sharply over the next couple of months, but together with the BoE’s response earlier today, it greatly improves the chances that the UK economy rebounds in the second half of this year."