UK corporates have offered resounding support for this year’s Budget, with 88% stating that the business-related measures outlined by the Chancellor will have a positive impact on private sector growth while more than three quarters of respondents believe the Government now offers a clear plan around generating this growth.
In a survey of more than 400 senior executives of companies with turnover above £5 million across the UK, the findings also revealed 57% of corporates believe the Budget will make the UK more competitive internationally.
The Barclays Corporate 2011 Post-Budget Survey offers further good news for the Coalition, with a near unanimous 92% of business leaders stating the content of the Budget means the UK will be a more favourable place to do business over the long term, although this was less emphatic in the short term, with 74% stating that the Budget would provide a better environment for businesses immediately.
John Pitchford, Head of Chester, Barclays Corporate, said the results married with the many conversations he was having with companies across Wales:
“While some of the measures outlined in the Budget such as the accelerated reduction in corporation tax will have a real and almost immediate impact on companies, the most important aspect of this Budget is the positive signals it sends to a corporate sector which has been seeking both stability and reassurance from Government around its underlying stance towards business.”
Companies are quite willing to take some pain in the short term to bring the deficit down, with 85% of the senior executives surveyed stating the Government should stay the course with planned spending cuts. The number of businesses for and against the need for the 50p tax rate today is split almost 50/50 amongst corporates, although 80% of respondents believe this tax rate will be harmful to the economy over the long term.
However, UK corporates are also sceptical about whether businesses themselves are doing enough to fuel growth, with the majority (59%) stating that UK companies are not investing enough to support economic recovery. And three quarters of respondents said the Budget had not motivated them to invest in their businesses.
John Pitchford continued:
“Business investment is going to be one of the key factors in how much economic growth we can achieve this year. If businesses collectively gain the confidence to invest a little more readily as Budget measures start to positively impact on individual operations then George Osborne really has achieved something meaningful.”
Looking ahead, when asked if the Coalition Government had a clear long term vision for the economy, two thirds of UK corporates believe that they do, but that they are still not communicating this vision clearly enough.
