IoD press release  Budget leaves business leaders dissatisfied despite support for energy and regulatory reforms

Business leaders did however express support for a number of individual measures announced by the Chancellor:

• VAT reductions on electricity and wider energy cost support achieved a net positive score of +44%.
• The reduction in regulatory costs for smaller businesses (+44%).
• The freeze in fuel duty (+42%)
• No increases to the headline rates of Corporation Tax, Income Tax, National Insurance Contributions or VAT (+41%).
• The development of GB Grid to improve grid connections (+39%).

IoD members also welcomed measures aimed at boosting entrepreneurship and investment, including the continued 10% Capital Gains Tax rate for eligible founders’ gains up to £10 million (+36%) and the doubling of Enterprise Management Incentive (EMI) share option limits (+28%).

However, the survey identified significant concerns around policies that increase business costs. The 3.9% increase in the National Living Wage and National Minimum Wage received a net negative score of -46%, making it the least popular measure among respondents. The additional 3% bank surcharge also generated a net negative response (-17%).

Anna Leach, Chief Economist at the Institute of Directors, said:

“More than half of respondents to our snap poll feel negatively about the package overall, compared with fewer than one in five who are positive.

“That doesn’t mean there is nothing to welcome. Measures to reduce energy costs and regulatory burdens have received a relatively positive reception, alongside support for entrepreneurs and business founders. But the increase in the minimum wage has attracted particularly strong criticism, with nearly six in ten respondents expecting it to have a negative impact on their organisation.

“Members’ comments reveal a frustration with the sheer number of individual announcements that appear unlikely to make much difference to the businesses they run. There is a sense that, while some of the measures are sensible in isolation, they don’t add up to a sufficiently substantial response to the challenges facing UK businesses.

“The government has produced a Budget containing a great deal of policy activity. The reaction from our members suggests it has more to do to convince business leaders that this will translate into meaningful economic change.”

Full results

278 responses from across the UK, conducted in the 24 hours after the Chancellor’s Budget Statement.14% ran large businesses (250+ people), 19% medium (50-249), 25% small (10-49 people), 30% micro (2-9 people) and 11% sole trader and self-employed business entities (0-1 people).

How do you feel about the Chancellor’s Autumn Budget and its associated announcements?

To what extent do you think the following announcements in the Budget will have a positive or negative impact on your organisation?