Wednesday March 12, 05:12 PM
ROUNDUP UK Budget slammed by industry for over-optimism, offering little
LONDON (Thomson Financial) - Today's maiden Budget by Chancellor of the Exchequer Alistair Darling has been slammed by UK lobby groups and trade associations for being overly optimistic in his forecasts, and offering little to help a slowing economy.
Industry professionals claim that Darling's GDP forecasts are still too high despite being revised down, and have rounded on him for doing little to help struggling sectors.
'The Chancellor's Budget economic forecasts remain unduly optimistic,' said David Frost, director general of the British Chambers of Commerce.
He added that though the upward revision for next year's public sector net borrowing is realistic, the figures for subsequent years remain too hopeful.
'Over the medium term there is a very major risk that the fiscal rules would be breached without further action,' said Frost.
He also criticised Darling for not scrapping the planned two pence fuel duty rise altogether, rather than just postponing it until October.
'As the Chancellor reduces his own economic growth forecasts, he should have said that he is scrapping the 2 pence rise rather than merely deferring it,' Frost said.
The Budget has also hit the retail sector hard, with the British Retail Consortium criticising the decision to increase taxes on alcohol, and the possibility that compulsory fees could be introduced for carrier bags.
The business lobby said Darling is 'using claims of tackling social and environment ills as an excuse to take yet more tax from hard-pressed businesses and consumers'.
On compulsory carrier bag charges, the BRC said Darling had failed to offer significant incentives that could make a real difference to the environment and to the economy and was instead 'trying to disguise the need to plug holes in his finances'.
Elsewhere, the Council of Mortgage Lending said the measures for the housing and mortgage market will do little to alleviate problems in the short term.
'There was little of immediate concrete substance for the housing or mortgage markets in this Budget,' said Michael Coogan, director general of CML.
'While there may prove to be benefits in the long term, the Chancellor ducked the pressing nature of some of the issues that are facing the markets right here and now,' said Coogan.
Not all the feedback was negative though with the UK's biggest employers lobby voicing tentative praise for the Budget.
'The Government has much to do if it is to win back its enterprise credentials, but the measures announced today are a credible first step on the road,' said Richard Lambert, director-general of the Confederation of Business Industry.
He was also optimistic that the business community will come to terms with the controversial changes to capital gains tax, which the government has confirmed will go ahead.
'Although the anger over capital gains tax is still simmering, entrepreneurs and smaller businesses will recognise that the Government has made an attempt to listen,' said Lambert.
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