Chancellor’s strategy falls short, as Neil Hodgson reports on the concerns of Merseyside businesses
LIVERPOOL accountant Stephen Hunter has cast doubt over Chancellor Alistair Darling’s sums. The head of tax for KPMG in Merseyside said: “The Budget projections look like a triumph of hope over experience.
“Despite having to drastically downgrade his forecast for growth this year, the Chancellor still expects the economy to rebound over the next two years.
“Even though Mr Darling insists the end of the recession is in sight, we are still looking at eye-watering budget deficits and a doubling of public debt.”
Mr Hunter said that if the Chancellor’s forecasts prove over-optimistic, the public finances will turn out “even worse”.
He said: “The plans for repairing the public finances are long on ambition but short on detail. If history is anything to go by, significant additional tax hikes will ultimately be necessary as well.
“In trying to combine support for the economy with reassurances public finances will be brought under control, the Chancellor risks falling between two stools.
“If he hasn’t done enough to end the recession, the plans for improving the public finances will unravel as well.”
Lobby group the Federation of Small Businesses (FSB) said the Budget ignored a sector which it says is at the heart of job creation and economic recovery.
Norman Lay, FSB regional chairman, said: "We welcome moves to focus on jobs and job creation for young people, but we are very disappointed that this Budget will do nothing for those firms which are doing their best to hold on to their valued employees. A Government-funded wage subsidy for short-time working would have been a real help, but was totally ignored.
"Small firms will also be disappointed not to have received the benefit of automatic rate relief. This will have boosted small businesses to the tune of £400m.”
Liverpool Chamber of Commerce director Brian McCann expressed concern at worrying price increases for business.
“We were very disappointed to see fuel duty will increase again in September by a further 2p,” he said.
“The Chamber has campaigned to reverse the recent 1.8p rise, but he has gone the other way. That is fairly disappointing.
“And there still appears an intention to increase the small business rate of tax, which is a major disincentive to many small businesses.”
While some may have applauded tax hikes for big earners, Downtown Liverpool in Business chairman Frank McKenna reckons the Chancellor has got it wrong: “I would criticise the 50% tax levy on people earning over £150,000 a year.
“That potentially stifles innovation and goes against the promises New Labour made when it first came to power. Tony Blair said we will not become the party of envy again. The whole idea is putting a stop to entrepreneurialism.”
