Business leaders broadly welcomed business changes from the UK Budget but are not convinced they will support new tech, training and development, with some industries feeling left out altogether, according to the latest iResearch Services survey.
Chancellor Rishi Sunak hailed the UK Spring Budget as a ‘Budget for Recovery” and now business leaders have had the chance to properly consider the £280 billion package, they largely agree.
The ambitious March Budget set out to protect businesses from the devastating effects of COVID-19 and the lockdown, safeguard employment and aid economic recovery. In short, to “level-up the country.”
Among the main measures introduced in the Spring Budget were the extension of the furlough scheme by six months, a rise in Corporation Tax and a raft of fresh business investment initiatives.
How were the changes received?
Two weeks later, almost 40% of the 500 business chiefs taking part in an iResearch Services post-Budget survey said that the Chancellor has fully protected their industries and another 32% feel he has partially safeguarded them.
However, they are less convinced about the effectiveness of initiatives concerning investment in new technology, training and creating new products and markets, with most viewing them as merely having a neutral effect.
And there are strong comments from business leaders who feel they have been left out of the support measures or that they do not go far enough.
iResearch Services CEO, Yogesh Shah, explains, “Rishi Sunak pledged to deliver all he had promised to British business and most leaders we have surveyed agree that he has helped counter the damaging consequences of COVID-19, although the furlough extension is mostly viewed as having a neutral effect on business investment initiatives.
“But there is an old saying that you cannot please all of the people all of the time, and given the widespread and serious need for support among UK businesses, there is criticism from leaders who feel the measures do not provide enough help for their companies.”
The range of opinion on the effectiveness of the Spring Budget from the iResearch Services post-Budget survey participants shows that the Chancellor has a huge task to satisfy everyone. We asked if the main measures would help, hinder, or have a neutral effect on UK businesses and if they will bring about a change in priorities.
Some business leaders were delighted at the Budget measures, with comments like: “It is the best business Budget within memory!”; “I have a true father in Rishi Sunak, doing the best for us all in these tough situations”; and “I believe it will help with the COVID-19 pandemic and hopefully move the economy in the right direction.” Or, simply, “It’s a bloody good Budget!”
Others recognised its potential to aid business recovery and economic growth. ”This is the first step in the outcome of recovery.” “It gives more time to balance our books through the extended furlough scheme allowing us to upskill/reposition our existing staff and enable further career development” and “It has allowed us to retain some staff on furlough that would otherwise have been made redundant within the next few weeks.”
But some British business leaders expressed extreme disappointment, including, “At the moment we are still in survival mode.” “This helps the few not the many.” “The Budget has been criticised for fairness and the government do not support my company” and “I want to leave the UK now more than ever!”
Diving into the detail
iResearch Services surveyed 500 C-Suite executives, business leaders, industry influencers, executives, and professionals across 15 sectors, asking whether the Spring Budget has been a success and if it will change their priorities over the next six months.
Across the business sectors, around one in four (38.8%) believe Rishi Sunak has fully protected their industry and 32% partially protected it, while 22.6% say he has not.
Most business leaders (37.2%) state the six-month furlough extension will have a neutral effect on investment in technology and tools, with 32.2% saying it will help and 21.2% it will hinder their business. When asked if this will change their priorities for investment in technology and tools over the next six months, 32.8% say it will have a neutral effect, 27.4% say it will help and 31.4% hinder.
New market opportunities?
A similar message was expressed about aiding a move into new markets, with 33% saying the effect will be neutral for their business, 23.2% it will help and 22.6% hinder. However, most (31.2%) say it will hinder a change in their business priorities over the next six months, while 30.8% say it will have a neutral effect and 24.2% that it will help.
New products and services
The ability to develop new products or services is also seen as mostly neutral by 31.6%, being a help by 26% and a hindrance by 21.8%. Most (30.4%) think it will have a neutral effect on changing their business priorities, with 27.6% saying it will help and 28.6% that it will hinder.
Most business chiefs surveyed (29.8%) say the furlough extension will have a neutral effect on restructuring and streamlining, with 28.2% believing it will help and 20.4% hinder. It is a similar result concerning any change in business priorities, with 31.2% saying the effect will be neutral, 29% that it will help and 27.4% that it will hinder.
Training and skills development
Looking at staff training and upskilling, 35.4% state there will be a neutral benefit, 24.2% believe it will help and 20% say it will hinder. However, more leaders (32.4%) say it will help their business priorities change in the next six months, while 29.8% say it will have a neutral effect and 26% that it will hinder.
Environmental, social and governance (ESG) progress
A higher percentage (40%) say the effect on environmental, social and governance measures will be neutral, with an almost even split between those that say it will help (18.6%) and those that say it will hinder (18.8%). Most (35.2%) say it will have a neutral effect on changing business priorities, while 26.6% state it will help and 23.6% that it will hinder.
When it comes to increasing employee numbers, most again think the effect will be neutral (33.2%), with 20.2% saying it will help and 24% hinder. But a more pessimistic result is seen when considering whether business priorities in this area will change over the next six months, with 31% saying it will hinder an increase in headcount, 27.2% that it will have a neutral effect and 25% that it will help.
There is increased optimism about the ability to maintain staff numbers, with most (32.8%) saying the furlough extension will help, 29.8% saying it will have a neutral effect and 18% fearing it will hinder. And the sentiment is confirmed when it comes to changing future business priorities with 34.8% saying it will help, 27.8% believing the effect will be neutral and 23.4% stating it will hinder.
The figures are even more positive over minimising redundancies, with 36.6% stating they will help, 21.4% believing they will have a neutral effect and 19.4% saying they will be a hindrance. Most (37%) also say it will help change business priorities over the next six months, while 21% say the effect will be neutral and 27.2% that it will hinder.
Backing the Budget?
As mentioned in our pre-Budget blog , there is an overwhelming backing for the decision to increase Corporation Tax to 25% in 2023, combined with the introduction of a new Small Profits Rate to ensure only businesses with profits of over £250,000 will be taxed at 25%.
More than half (55%) of those in our post-Budget survey say the Corporation Tax rise is fair, with 30% against and 15% unsure. Six in 10 (61.8%) say the future increase gives them enough time to prepare, with 25.2% saying it does not and 13% unsure.
Discover more details about the UK Spring Budget measures.
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