Budget leaves business leaders dissatisfied despite energy and regulatory reforms

A snap poll by the Institute of Directors following the Chancellor’s Autumn Budget statement, more than half of business leaders (53%) viewed the Budget negatively. In contrast, just 19% viewed the Budget positively, giving an overall net satisfaction score of -35%.

Business leaders did, however, express support for several individual measures announced by the Chancellor: These include VAT reductions on electricity and wider energy cost support, which achieved a net positive score of +44%. The reduction in regulatory costs for smaller businesses (+44%). The freeze in fuel duty (+42%)

The announcement of no increases to the headline rates of Corporation Tax, Income Tax, National Insurance Contributions or VAT (+41%)received support. and the development of UK Grid to improve grid connections (+39%).

IoD members also welcomed measures aimed at boosting entrepreneurship and investment, including the continued 10% Capital Gains Tax rate for eligible founders’ gains up to £10 million (+36%) and the doubling of Enterprise Management Incentive (EMI) share option limits (+28%).

However, the survey identified significant concerns around policies that increase business costs. The 3.9% increase in the National Living Wage and National Minimum Wage received a net negative score of -46%, making it the least popular measure among respondents. The additional 3% bank surcharge also generated a net negative response (-17%).

Anna Leach, Chief Economist at the Institute of Directors, said “More than half of respondents to our snap poll feel negatively about the package overall, compared with fewer than one in five who are positive.

“That doesn’t mean there is nothing to welcome. Measures to reduce energy costs and regulatory burdens have received a relatively positive reception, alongside support for entrepreneurs and business founders. But the increase in the minimum wage has attracted particularly strong criticism, with nearly six in ten respondents expecting it to have a negative impact on their organisation.

“Members’ comments reveal a frustration with the sheer number of individual announcements that appear unlikely to make much difference to the businesses they run. There is a sense that, while some of the measures are sensible in isolation, they don’t add up to a sufficiently substantial response to the challenges facing UK businesses.

“The government has produced a Budget containing a great deal of policy activity. The reaction from our members suggests it has more to do to convince business leaders that this will translate into meaningful economic change.”