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London Tech Week

Did UK Chancellor’s budget do enough for businesses?

UK-Chancellor-Jeremy-Hunt
UK Chancellor Jeremy Hunt, pictured in 2019. Picture credit: Depositphotos – Photo by Ale_Mi

The UK Chancellor’s budget had a Herculean task to accomplish on Wednesday 6th March. In what is likely to be his last attempt to bring the sunshine before the UK heads to a general election later in 2024, Chancellor Jeremy Hunt had to find incentives for the electorate – and especially the business community – to return a Conservative government this year, even as a new opinion poll put the party at its lowest popularity levels since 1978.

And he had to do it against an atmosphere of financial doldrums and political division which acts to severely limit his ability to display benevolence.

Chief among the Chancellor’s announcements was a second cut to the UK’s National Insurance of 2p in the pound, following the same cut in his last budget.

But there were other announcements in the budget that might well find support from investors, venture capitalists, and startups. A change in pension rules could stimulate business. A U-turn on angel investment thresholds might encourage more investors in, etc.

To find out whether the Chancellor’s announcements might shift the dial for businesses, we asked a handful what might be useful – and what didn’t go far enough.

National Insurance:

Eamonn Ives, Head of Research at The Entrepreneurs Network:

“Changes to National Insurance were always going to be what the Chancellor most wanted to talk about. The near-term 2% cut to Employee NI contributions will be welcomed by workers who’ve seen earnings squeezed and employers who’ve seen costs spiral. The longer-term ambition to ‘end the unfairness of double taxation of work’ is commendable, and would radically simplify the UK’s tax system.” 

Pensions and investment:

David Holt, Partner and Solicitor at Potter Clarkson: 

“The UK is home to some of the world’s most promising early-stage innovation. It’s encouraging to see that unlocking previously untapped capital to fund this is a top priority for the government through the Mansion House reforms. Hopefully, a larger pool of potential investors will be unlocked.”

Tim Mills, Managing Partner at ACF Investors: 

“With cross-party consensus and the continuing role of the British Business Bank, the Chancellor’s pension reforms put the UK on the front foot in an increasingly competitive global tech and investment landscape.”

Angel investment thresholds U-turn:

Emma Sinclair MBE, Founder and CEO of Enterprise Alumni:

“By reversing legislation on the definition of high net-worth individuals that would have disproportionately affected female entrepreneurs and female angel investors, the government has listened to the voices of women in business and acted swiftly. My hope is that we channel this momentum to continue pushing for real change in favour of women-led businesses in terms of funding.”

Frances Spooner, Partner at Marriott Harrison:  

“The Chancellor’s decision to reverse the changes introduced in January to angel investment rules will be broadly celebrated today by the UK’s high-growth sector, putting to rest a change that sat at odds with the government’s otherwise steadfast support for the UK’s entrepreneur and startup community.  

But to say this change is ‘positive to see’ might be a step too far; instead, it could be said that the Government is simply backtracking on an error in judgement that could have been avoided with the right consultation process.”

Women’s health: 

Priya Oberoi, Founding General Partner of Goddess Gaia Ventures: 

“The Chancellor’s commitment to investing £45m into medical charities is just a drop in the ocean. Women’s health is historically and brutally underfunded. I am convinced that this investment is not going to come from the public sector – just look at the inadequate £3m token donation to cancer charities in the Chancellor’s budget.”

Enough?

Only an election will tell…

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