CBI Highlights Positive News and "challenges ahead" for UK Businesses

CBI Highlights Positive News and "challenges ahead" for UK Businesses

2014 Budget

Flexible workspace operators and trade suppliers can take away a number of positive points following yesterday's Budget 2014 announcement.

Part of the good news comes in the form of economic growth, as the Chancellor announced that the Office for Budget Responsibility had revised its economic growth forecast upwards from 2.4% to 2.7% for 2014.

Yet, there are still questions to be answered.

In its Budget Special Report, the CBI (Confederation of British Industry) states that the budget "will put wind in the sails of business investment", and many of its key points offer potential benefits to workspace operators.

Among the highlighted offered by the CBI are:

Growth-enhancing measures:
The Seed Enterprise Investment Scheme (SEIS) - which Chancellor George Osborne declares is now permanent - has been emphasized by the CBI as an important growth-enhancing measure. The SEIS has been in place for two years and it has been hailed a success by government, giving startups and small businesses access to an important funding opportunity. As an incentive, this initiative also means that SEIS investors can receive 50% relief on income tax for the year the investment is made.

Other growth-enhancing measures noted by the CBI include doubling and extending the Annual Investment Allowance, and extending the R&D tax credit - which it says will boost early stage, innovative businesses which can often be loss-making in their early years.

As well as offering funding opportunities for new workspace businesses, these measures have the potential to boost small companies and startup firms which are a prime target for coworking spaces and other early-stage collaborative workplaces.

For manufacturing and export businesses, the CBI points to the Chancellor's decision to double the direct lending scheme and cut its interest rates as a method that "should strengthen the UK export finance armoury". It adds: "The government must now work much harder to promote these schemes, since many fast-growing firms are unaware of the support available."

The government announced measures to protect energy manufacturers from increasing costs as part of a £7bn package. The CBI welcomes the government's decision to support these firms, stating that energy intensive industries are crucial to building a low-carbon economy.

As we have seen with previous BCA MarketWatch reports, the energy sector is a significant part of the flexible workspace client base. Therefore measures to support these firms and provide stimulus for growth is a positive outcome both for workspace operators, and for the energy sector as a whole.

Business travel and flood defences:
Additional funding for flood defences in some of the UK's hardest hit regions will be welcome news to workspace operators based in flood-risk locations.

Furthermore, the Chancellor's action on Air Passenger Duty is a step towards tackling the UK's notoriously high air taxes - a move that could help lower the cost of essential business travel and, primarily, to benefit exporters. "But there is still more to do to cut costs on short- and long-haul routes and help exporters get a leg up in new markets," the CBI notes.

Apprenticeships have made a significant comeback and as such, the CBI states that the government's commitment to invest in young people and boost apprenticeships is "rightly on the agenda".

Recent figures released by the ONS show that the number of unemployed people in the UK fell by 63,000 to 2.33 million in the three months to January 2014, while the number of unemployed 16 to 24-year-olds dropped by 29,000 during the same period - the lowest level since 2011.

However, there is still work to be done. I

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