Hammond’s first and last Spring Budget delivered on 8 March doesn’t seem very small business friendly. At first blush, increasing the National Insurance contributions for self-employed to fund care might not seem anything to worry about. But in the same breath corporation tax is being reduced. So, those larger businesses that have a choice about where they base themselves pay less, but small sole traders who have less flexibility are penalised. A tax on “strivers” it would appear.
This follows his predecessor’s naked aggression towards smaller buy to let landlords. The stamp duty rises and reduction in tax breaks are also a tax on “strivers”. If you are a so-called professional landlord with 12 or more properties the rules are different. Hammond could have unwound this divisive and economy depressing position but chose to swerve it.
The UK has been drifting along in neutral for years. Given the looming Brexit negotiations we might have expected a Budget designed to accelerate growth. One that may have had us changing gear and aiming to overtake our competitors. Instead we were presented by a fairly limp, non-event that just seems to unfairly penalise hard working people. May’s government and this Budget seem a throwback to the rather uninspiring days of wet conservatism. Is Hammond Clarke’s son?
At a time where smaller businesses already have significant change to overcome – namely April’s National Living Wage increase and pension Auto-enrolment for smaller firms – last week’s Budget should have been an opportunity for Hammond, May, et al to demonstrate their commitment to boosting the economy by supporting our small businesses.
What the UK needs is help for SMEs; less red tape, more support for exports and chance for the risk takers behind SMEs to hold on to a fair share of what they create.
The Budget doesn’t do this, nor does it seem to even attempt to do this. In order for us to ride the inevitable Brexit bumps and shocks we will need a more robust economy with real growth and a sense of optimism. This must start with support for SMEs who make up the overwhelming majority of businesses in the UK.
Let’s hope that in the Autumn Budget, Hammond takes the chance to be bold and help the SME engine that drives the economy. If the Government fails to direct support in this direction again, it may find its aspirational support looking elsewhere for backing.