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Business MK Latest News | Latest News
It is how businesses respond that really matters
BUSINESSES, not Budgets, will lead the economic recovery by creating new jobs and wealth and the taxes needed to pay for the government’s plans.
That is the message from local chartered accountant Jonathan Vowles in an early reaction to the Budget statement on Wednesday.
Despite the government’s efforts to reduce the public spending deficit, public finances remain in the red and tax rises and spending cuts already announced are set to take effect.
Mr Vowles (pictured), whose firm is based in Cranfield, said: “There are some very welcome headline announcements in this Budget but the devil is always in the detail and things are rarely as rosy as Chancellors paint them in their speeches.
"But even if the details turn out not to be too devilish, we should not get carried away.”
He warned that the public sector cuts would impact on the private sector. “For some local people the pain is going to be excruciating as their jobs go, their public sector contracts disappear, their businesses fail, and the benefits system no longer gives them what they need.
"If they work hard and manage to avoid all of that, they could find the taxman taking up to 60p in income tax from every extra pound they earn.”
Mr Vowles added that cuts to corporation tax, relaxed planning restrictions and new enterprise zones would only be of limited help. He said: “It is businesses and not Budgets that offer us the best hope of putting things right by replacing the jobs and wealth lost, and generating the extra taxes needed to pay for everything.
“It is how businesses respond that really matters, since they are the real engine of growth. So the region’s job and wealth creating businesses need to stand up and be counted by taking urgent action to make it happen.”