The Budget 2009

Chancellor Alistair Darling announced a set of measures with the potential to shape not only the landscape of UK enterprise but the entire economy for years to come.

When he addressed a tentative House of Commons on Wednesday (April 22nd), Mr Darling was in a bullish mood, in spite of the recession blighting the country's small business community.

The chancellor announced that a £750 million strategic investment was to be made available, with a third of this amount ear-marked specifically for low carbon and sustainable businesses.

Judging by this decision, the government is keen to emphasise the importance of a green collar workforce to the future of British commerce.

Following this, the chancellor revealed that those firms struggling most against the UK's economic meltdown were to be handed some much-needed respite. He revealed that loss-making firms would be able to reclaim more taxation paid on profits over the last three years until November 2010.

Additionally, the exchequer unveiled a number of extensions and reliefs to capital allowances for small companies as well as a new credit insurance scheme.

Under these changes, capital allowances for new investment will rise to 40 per cent for one year, while the Treasury will temporarily offer to match private sector trade credit insurance if insurers withdraw their own cover.

However, some parties had a mixed reaction to the speech, praising it in some aspects but also suggesting it did not do enough to address the problems currently facing small businesses.

David Frost, director general of the British Chambers of Commerce, said: "The chancellor appears to have understood that it will be business driving the economy out of recession and there are some good measures to reflect this."

Despite this, the chambers expressed concern regarding the decision to increase the taxation band for those earning more than £150,000 per annum, suggesting that it could lead to an exodus of the UK's leading professional talent.

"The top tax rate in France and Germany is 40 per cent and 45 per cent respectively, giving us the highest top rate of our major European competitors", Mr Kern added.

John Wright, national chairman of the Federation of Small Businesses (FSB), claimed that the measures did not go far enough to protect companies and their staff.

He commented: "The government has missed an opportunity to save thousands of businesses and the jobs they create."

Mr Wright suggested that small firms would also be hurt with the government's decision to raise taxation on fuel, which could directly affect the UK's logistics industry.

"Small firms will be sorely disappointed with the 2p rise in fuel duty from September which is just another tax at a difficult time," he added.

The FSB also felt let down by the department for business's decision not to introduce automatic rate relief; something which the group claims could save smaller enterprises £400 million annually.

Despite this raft of new measures, some companies may not help but feel that many of the government's trump cards were dealt at November's pre-budget report. But while Mr. Darling refrained from implementing spontaneous, short-term measures such as last year's VAT cut, the small business sector may just have been offered one more lifeline in a sea of economic turmoil.

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