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Comment on the Budget Announcement

Comment on the Budget Announcement

Budget Announcement from APSCo

The Association of Professional Staffing Companies (APSCo) is providing a free detailed Budget briefing, available to view and download from the company’s website, from 9am Thursday 22nd March 2012. The report  will give an in-depth analysis of the Budget and how it will impact the recruitment and employment market.

 

Executive Director at recruiter Badenoch & Clark comments on the Budget:

Matt Gascoigne, Executive Director at Badenoch & Clark said:

“Growth was at the forefront of today’s Budget. But ensuring continued growth of UK Plc will require an increased commitment to enhancing skills and employee engagement over, not only the short term, but also the long term. During the next year it will become increasingly important for organisations to ensure that their talent pipelines do not run dry and that they up skill incumbent employees. This is particularly true for the public sector which has seen one of the toughest jobs markets to date.

“Following market demands, companies have become more particular in the skill sets and experience they are seeking at particular levels and recruitment opportunities do remain across both the public and private sector. However, to ensure long term success it is important that companies also consider the need to grow and enhance future talent and continue recruitment at entry level positions.”

 

Recruitment industry Budget comment 

More engineering-focused education is critical to support UK chancellor George Osborne’s plans for job creation, says Paul Flynn, MD of Earthstaff

“We welcome plans for job creation in today’s budget. The government has a huge opportunity in the form of the energy sector, where the boom in renewable and traditional energy projects across Europe has meant firms are crying out for talented people. However, more effort needs to be made to promote engineering as a viable career to the UK’s younger generations. We need to raise the identity of engineering and ensure that its importance and credibility cascades down to grass roots level so that when a child starts school, instead of wanting to be like Alan Sugar, they are talking about Isambard Kingdom Brunel, Sir James Dyson and James Watt.

 

Budget Reaction from APSCo

In today’s Budget statement, Chancellor George Osborne said that the Government will press forward with the planned integration of income tax and national insurance contributions, launching a detailed consultation on the issue next month. Recruiters and contractors are concerned that merging income tax and national insurance contributions could erode the tax benefits of contracting.

                              

Commenting on the announcement,  APSCoChief Executive Ann Swain says: “Merging income tax and national insurance contributions is a great way to cut red tape, but we need to make sure it doesn’t affect limited company contractors’ dividend payments. APSCo will be responding forcefully to this consultation, making the case for the flexible labour market. The Government must safeguard flexible working by retaining the tax benefits of contracting.”

 

CBI IMMEDIATE REACTION TO THE BUDGET

The CBI today gave its immediate reaction to the Chancellor's Budget speech. A fuller statement will follow later today.

John Cridland, CBI Director-General, said:

“Family budgets have been under great pressure, and by putting more money in the pockets of ordinary people, the Chancellor has provided a much-needed confidence boost.

“The Chancellor has also painted a clearer vision of how the UK will earn its living in the future and, by seizing the opportunity to make sure our corporate tax system is more internationally competitive, he has sent a powerful signal to companies to invest, do business and create jobs in the UK.

“An extra one per cent off corporation tax this year could make a big difference to investment intentions. Plans to reduce the top rate of tax to 45p by April 2013 will show our top and aspiring talent that this Government wants them to create wealth here.

“With many calls on the Chancellor to spend money he didn’t have, the best news for businesses is that he stuck to his guns and delivered a fiscally neutral programme.

“If businesses were looking for more, it was in the area of deregulation. For smaller businesses, things may not feel very different on the ground. It would have also have been a huge relief if the Chancellor had taken the opportunity to get rid of the currently unworkable Carbon Reduction Commitment.”

 

REC response to Budget

 

Commenting on new policy announcements made in the  Budget, REC Chief Executive Kevin Green says:

“With today’s Budget, the Chancellor has taken solid steps in developing an internationally competitive tax regime in the UK to help kick start job growth. But it could have been bigger, bolder and braver, so I give this Budget 6/10 for jobs.

 “The change in the 50p rate of tax sends a positive message to home-grown entrepreneurs that the UK rewards success and job creators.

“Changes to corporation tax will encourage businesses to invest in their workforce. Plus, in continuing and speeding up year-on-year reductions the Chancellor creates certainty for businesses, which is so important in encouraging growth.

“It was also good to see support for critical growth sectors such as oil and gas, life sciences and creative industries.

“But there were some missed opportunities – such as specific measures to cut EU red tape, reduce regulations surrounding agency workers and to simplify the new pensions auto-enrolment system, all of which are necessary moves to help business and encourage job creation.”

 

Budget Comment - Paul Ross, Barker Ross Group

Paul Ross, founder and managing director of recruitment company, The Barker Ross Group, comments on the budget:

Although we are seeing many indications that a recovery is on the way, I believe it is a very fragile recovery and needs support.  The immediate cut in corporation tax should be a big help now and I hope will prevent many firms who we know are struggling.

I also applaud the move to increase personal tax allowances.  It must be more worthwhile for people to enter the job market, than rely on benefits.  And as we are a major supplier of temporary and permanent workers to all sectors any increase in supply is really good news for us and our clients.

Also many of our largest clients are in the construction industry I also am pleased to see that extra funding for new homes will be forthcoming. In addition, any extra money, public or private, for the national infrastructure has to be positive news. Construction has been flat for some time, and many companies have not been recruiting and this is now causing skills shortage in some areas.

Although it’s a small measure, the freeze on duty for road hauliers will hopefully help some of the hard pressed firms out there.

 

Budget reaction: Modis

Budget recognises IT’s economic potential, but skills shortfall may hamper progress

Sid Barnes, executive director at leading IT recruiter Modis, says:

“The Chancellor’s budget gives important recognition to the vital role of information technology in strengthening the UK economy.

“We applaud his vision that the UK will “become Europe’s technology centre” and commitment to tax relief to promote innovation and grow the UK’s strong gaming enterprise. With high aspirations for the UK’s technological leadership, further thought must also be given to developing a talent pool. A lack of technology skills is hampering progress in information technology – an essential part of working life regardless of the industry sector. In recent Modis research with IT leaders, 27% are already struggling to source quality candidates with IT expertise.

“The &pound100m investment in superfast broadband is a vital to ensure all UK businesses can operate effectively in the digital age. Premier IT infrastructure is needed to support business operations in every corner of the country – not only for technology hubs from Silicon Glen to Silicon Fen.”

 

CBI FULL REACTION TO THE BUDGET

The CBI today gave its full reaction to the Chancellor's Budget speech.

John Cridland, CBI Director-General, said:

“Family budgets have been under great pressure, and by putting more money in the pockets of ordinary people, the Chancellor has provided a much-needed confidence boost.

“The Chancellor has also painted a clearer vision of how the UK will earn its living in the future and, by seizing the opportunity to make sure our corporate tax system is more internationally competitive, he has sent a powerful signal to companies to invest, do business and create jobs in the UK.

“An extra one per cent off corporation tax this year could make a big difference to investment intentions. Plans to reduce the top rate of tax to 45p by April 2013 will show best and aspiring talent that this Government wants them to create wealth here.

“With many calls on the Chancellor to spend money he didn’t have, the best news for businesses is that he stuck to his guns and delivered a fiscally neutral programme.

“If businesses were looking for more, it was in the area of deregulation. For smaller businesses, things may not feel very different on the ground. It would have also have been a huge relief if the Chancellor had taken the opportunity to get rid of the currently unworkable Carbon Reduction Commitment.”

Commenting further, Mr Cridland added:

On corporation tax:

“The additional cut in the headline rate of corporation tax will help make the UK a more attractive place for companies to invest, do business and create jobs. It puts a rate of twenty per cent within our reach.”

On changes to the 50p tax rate:

“Reducing the 50p income tax rate will send a clear signal that the UK is open for business.  We must continue to encourage top talent to live and work in the UK.”

On oil and gas tax relief, including for decommissioning oil rigs:

“Today’s announcements will give more certainty around decommissioning and new field allowances. This will unlock investment and help ensure our security of energy supply.

“Companies will now look forward to seeing the detail of the gas generation strategy which must join the dots on the Government’s approach to energy generation and act as a positive signpost to investors.”

On measures to support small and mid-sized businesses:

“We need to find new alternatives to bank lending so that small and medium-sized businesses can grow and create jobs.

“The Business Finance Partnership is an innovative way of matching previously untapped private finance with demand. Doubling the incentive under the enterprise management scheme will enable entrepreneurial, high-risk companies to motivate their staff. Increasing the government’s risk sharing under the Enterprise Finance Guarantee will make banks more able to boost small business lending.”

On deregulation:

“Businesses, especially smaller ones, will be disappointed that the Chancellor did not do more to cut red tape. There needs to be much greater urgency to the Government’s deregulatory agenda. We must bring down the barriers to companies hiring staff and creating new jobs.”

On the Carbon Reduction Commitment:

“The Government is wasting time by announcing yet another consultation on the Carbon Reduction Commitment, rather than getting on with scrapping this complex and bureaucratic scheme.”

On air passenger duty:

“The Government has missed an opportunity to reinforce that the UK is open for business by going ahead with an 8% rise in air passenger duty. The UK’s tax on air travel is already the highest in the EU and this rise puts us at a competitive disadvantage.”

On carbon price floor:

“The 33% rise in the carbon price floor will hit UK energy-intensive businesses hard, and underlines the need for a more coherent strategy to unlock low-carbon industrial growth.

“In the meantime, we urgently need support to those companies most at risk from the increase.”

On pensions’ tax relief:

“It’s good that the Chancellor heeded calls from businesses to leave last year’s settlement on pensions’ tax relief alone. Further changes to pensions’ relief would have hit many higher earners, and harmed our ability to attract top talent to the UK.”

On planning:

“The National Planning Policy Framework, and in particular the presumption in favour of sustainable development, will help to give businesses confidence to invest in critical local infrastructure when it is launched next week.

“The new planning framework should encourage local authorities to help boost growth while striking the right balance with social and environmental sustainability.”

On the R&D tax credit:

“We welcome the Government’s commitment to introduce an above-the-line R&D tax credit. The proposed changes will make the UK a better place to do R&D by providing greater certainty for businesses, and boosting the visibility of the credit to international investment managers.”

On Lord Heseltine’s review of industrial policy:

“Industrial policy needs to be at the heart of our plans for growth, so it’s good news that the Chancellor has listened to businesses and announced an independent review led by Lord Heseltine.”

On Enterprise Zones:

“The new Enterprise Zones announced today will help support greater economic activity right across the UK. These new zones will encourage investment and give business a strong incentive to expand activity creating jobs in parts of the country that need them most.”

On tax credits for TV drama, animation and computer game industries:

“The new tax credits for TV drama, animation and computer game firms will be a welcome boost for the UK’s creative industries. These highly mobile companies operate on a global stage, and their exports generate much-needed wealth and jobs.

“With other countries already offering attractive tax incentives it’s important that the UK can continue to compete.”

On measures to improve broadband:

“The Government’s commitment to support private sector delivery of world-leading broadband is right on the mark, and will ensure the UK’s high-tech companies have the infrastructure they need to be global champions.”

“We also welcome the additional &pound150m of public money to support the roll-out of super-fast broadband coverage in smaller UK cities, although getting the details of this funding right will be critical to its success.” 

On controlled foreign companies (CFCs):

“The CBI’s lobbying on CFCs will result in draft legislation which meets the Treasury’s stated objectives of simplification and greater competitiveness. Our proposals for a & lsquo;Gateway’ will simplify what has been a hugely complex system by making clear which companies are affected by the legislation.”

On anti-tax avoidance measures (GAAR):

“We welcome the consultation on the proposed General Anti-Abuse Rule (GAAR). The legislation needs to balance the need to stamp out truly abusive avoidance schemes with the need for clarity and certainty around legitimate tax management.”

On public sector pay deals:

“Localising pay setting will allow public sector employers to have greater control over their budgets, and so will deliver taxpayers better value for money. It should also help level the playing field for private sector companies and help them to create new jobs.”

 

Scott Liversidge, managing partner of Flame Health, the specialist recruitment firm in the healthcare and pharma sector, comments on the budget implications to his business, The Midlands and SMEs across the UK

“The most important factor moving forward is a strong and stable economy.  Fundamentally, we need renewed confidence in the UK and European economies and from my perspective.  I didn’t expect that to be resolved today and it hasn’t. However I feel businesses need to continue being creative and strategic whilst continuing to collectively work hard in order to achieve our objectives - there does not appear to be any major game changes today.

From a regional perspective I was  hoping we see plans for the electrification of the Midland mainline to shave 1hr from a return journey to London. It also it is disappointing not to see Nottingham in the initial wave for super fast broadband especially given that we are a web based business using cloud technology!

Our planned growth will require investment in R&D from an IT and Web perspective, so the R&D Tax relief will be a welcome initiative along with the 1% to 24% reduction in Corporation tax in April 2012 which looks like it will be ultimately reduced to 20% over the next few years in line with VAT which would be a welcome change

I was hoping for more of a focus on SME’s being encouraged to recruit young people, given it such a concern for the future of the economy. Speaking form experience we have recently explored the apprenticeships in Nottingham and unfortunately pulled out due to a long and lengthy protracted process. Moreover there was  very little support provided and great difficulty in understanding funding options available – I am sure we will revisit in the future .”

FCSA expresses concerns over the detail of the Budget

Commenting on today’s Budget Stuart Davis, Chairman of the Freelancer and Contractor Services Association (FCSA) says:

“Although overall we think the Budget will help to stimulate the economy, once again the Government has missed another opportunity to stimulate the critical flexible workforce made up of freelancers and contractors.

We give a cautious welcome to Treasury’s plans to introduce a new cash basis for calculating tax for small unincorporated businesses. We await the consultation but if implemented correctly this could be extremely helpful to reduce the administrative benefits for freelancers and contractors.

“We are however, very concerned at the Government’s plans to require office holders/controlling persons who are integral to the running of an organisation to have PAYE and NICs deducted at source by the organisation by which they are engaged. We believe this is the Government’s attempt to try to prevent senior civil servants from legitimately working as freelancers and contractors as recently highlighted in the media. The Government plan to consult on their plans which is welcome but already we believe this demonstrates once again how the Government have a complete lack of understanding of the flexible workforce.

“As the FCSA we have been involved in the IR35 Forum so welcome the announced enforcement activity and we would urge all freelancers and contractors to seek appropriate advice and support to ensure that they do not fall foul of IR35.”

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