Emergency budget first look - Osborne backs business
June 22nd 2010 There was good news for industry in today’s pro-business emergency budget by George Osborne.
The Chancellor pledged there would be no further reductions in capital spending totals in this Budget, meaning transport projects could get the go-ahead providing sound economic benefit can be proven.
Several transport projects have been given the go-ahead to boost regional development, including the upgrade of Tyne & Wear tunnel and Manchester Metrolink and the upgrade of rail lines to Sheffield and Leeds.
Projects with "a significant economic return to the country" would be given priority in the autumn spending review, Osborne added.
In addition, there was support for businesses in terms of reduced corporation tax, which will fall from the current 28% by 1p in the pound a year for four consecutive years until it reaches 24%. Tax for small companies will drop further to 20%.
In a bid to encourage entrepreneurship, anyone who sets up a new business outside London, the south-east and east of England will be exempt from £5,000 of National Insurance contributions for each of first 10 employees they hire.
That said, departmental budgets face severe cuts with unprotected departments, such as Transport, facing an average real cut of around 25% over four years.
The measures are forecast to result in reduced public sector net borrowing. Osborne predicted £149bn this year, £116bn next year, £89bn in 2012-13 and £60bn in 2013-14. Mr Osborne added by 2014-15 borrowing would reach £37bn, falling to £20bn in 2015-16.
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