Cautious welcome from province’s business leaders
Business organisations in Northern Ireland gave Alistair Darling’s Budget a cautious welcome, particularly measures to support small businesses. But many argued that time would |tell whether those measures would really benefit Northern |Ireland’s economy.
There was agreement that the £2.5m growth package to boost skills and innovation was good news and a feeling that the private sector should take responsibility for recovery once emergency measures such as quantitative easing were withdrawn.
Joanne Stuart, chairman of the Institute of Directors (IoD) in Northern Ireland, said: “We welcome the specific measures to support small and medium-sized businesses such as the doubling of the annual investment allowance, efforts to improve access to finance for small to medium-sized enterprises and the continuation of the business payment support scheme allowing businesses more time to pay their tax.”
But she added: “Efforts to encourage investment in new technologies and in innovation will have a longer term positive effect in an area which is critical to the development of a stronger private sector in Northern Ireland.”
Peter Burnside, head of tax at business advisers BDO, said changes to entrepreneurs relief, which would double the threshold of lifetime gains to qualify for the 10% rate of capital gains tax to £2m, recognised that “creating successful new businesses is the lifeblood of the economy”.
Glenn Roberts, senior partner of Deloitte in Belfast, also welcomed the boost, as well as the increased access to finance and £94bn available funding from RBS and Lloyds. But he added: “Like all policies, time will tell whether small to medium enterprises will truly benefit.”
PricewaterhouseCoopers said the Chancellor had shied away from offending business and consumer groups.
Its tax leader Lindsay Todd said: “There are opportunities for small firms, but the real impact is still unclear and will remain so until we see the impact of efficiency savings.”
But he said the province should welcome the proposed £60m for the development of UK ports to meet the needs of offshore wind turbine manufacturers.
“Given the size and location of Northern Ireland ports, port owners should be in a strong position to apply for funding under this initiative.”
Tax partner Martin Fleetwood said the best news for the province’s companies was the rate of corporation tax for small companies staying at 21% but added: “Our priority must be to sustain and develop the best of what we have in our local economy. To achieve that, we must find a blend of public sector strategic thinking and decisive private sector |commerciality. It is vital that our political leaders and business sector work together to build for economic recovery.”
Eamonn Donaghy, the chairman of the Northern Ireland Committee of Chartered Accountants Ireland, said the Budget had good news for the province, but that more had to be done to encourage business. “In order to encourage multinational inward investment we recommend the introduction of a new technology zone in Northern Ireland which would confer tax benefits, such as a 12.5% rate of corporation tax and a special regime of capital allowances, for companies within that zone.”
Glyn Roberts, chief executive of the Northern Ireland Independent Retailers Association, said: “The biggest disappointment in this Budget was that the Chancellor is still proceeding with the proposed hike in National Insurance Contributions. This is nothing less than a jobs tax and will hinder small business owners from taking on additional staff and therefore not address Northern Ireland’s unemployment problem.”