Budget Comment: Hugh Aitken, CBI
Chancellor set right tone for stability and consistency to benefit all
Businesses need stability and consistency to grow and prosper and this Budget sets the tone, providing a clear plan for fiscal health and growth. This Budget has some encouraging measures to help businesses create jobs for the benefit of all.
The oil and gas sector is a key industry in Scotland, supporting 450,000 UK-wide jobs, and is a major contributor to GDP, so it’s good to see it being given a much-needed boost with the reduction to the supplementary charge and other incentives. This will help address concerns over job losses and investment freezes, but pressures remain due to low oil prices.
The 2% cut off the duty on Scotch whisky is welcome as we must do what we can to ensure important exporting industries like Scotch whisky are able to compete internationally.
More broadly on exports, doubling UKTI funding to support British exports to China will help UK businesses tap into the growing middle class in Asia and it’s important that Scottish businesses also take advantage of that.
With business investment a crucial driver of growth, the Chancellor has signalled his intention to continue the Annual Investment Allowance. We want it to be made permanent in the Autumn Statement at £250,000 – this will fire the UK’s economic kiln by spurring smaller firms to invest in plant and machinery.
In terms of attracting investment to the UK, the reduction of the headline rate of Corporation Tax to 20% next month, is a meaningful step in making the UK the most competitive tax regime in the G20.
However, it is disappointing that the Government is moving out of step with the OECD Base Erosion and Profits Shifting process for updating the international tax rules. This puts UK firms at a competitive disadvantage and could put off would-be investors.