James Moore: The bookies have lost, but otherwise business loves it

Budget View

James Moore@JimMooreJourno
Wednesday 21 March 2012 18:05

Business loves it, at least most businesses love it. That's one thing to take home from this budget.

That was particularly true for big businesses, and there were certain sectors (creative industries, pharmaceuticals) that either were or should have been cock-a-hoop.

Even small businesses were not entirely left out. There was, it has to be said, less for them to be happy about but the measures to encourage alternative finance, for example, will help. And there were other bits and pieces too (but no movement on fuel duty which upset more than a few of their representatives).

What seemed to please the lot of them was the cut in the top rate of tax for the rather small number of people earning over £150,000. That will help richer proprietors of small firms and had business leaders generally rubbing their hands together with glee. Guess why?

There were measures to help the poorly paid too, at least those who aren't on benefits, as a sop to the Liberal Democrats. But the squeezed middle will still be squeezed while those at the top get a tax cut.

That is a massive political gamble. No wonder Compass, the left wing think tank, described Mr Osborne as "Robin Hood in Reverse".

The rather optimistic growth and job creation forecasts he touted had better be right if he is to get away with that one. Measures to tackle the avoidance of stamp duty by the owners of mansions might not claw back quite the amounts he was claiming if experts are to be believed.

But back to business. Perhaps the only really negative was for the gambling industry. The 20 per cent tax rate to be applied to gaming machines was in the box marked "worst case scenario".

There have been lots of critics in recent months who have complained about an alleged "proliferation of betting shops" on the high street.

The reason for this is not so much that gambling operators are targeting poor areas - as has been claimed - but that the abolition of the demand test in the last Gambling Act has meant the arrival of competition. No longer can an existing betting shop operator prevent a rival opening up across the street by opposing their licence before a magistrate, as used to be the case.

Such competition has actually been good for those people who use betting shops - they get a better deal. That competition is now going to go into reverse. A lot of shops will be closed.

I'm not a particular fan of the fixed odds betting terminals that are getting taxed, but if there is going to be a debate about gambling, let's conduct it on the proper terms shall we?

And perhaps tackle social evils like door-to-door lenders, pay day loans companies and pawn brokers. They cause far more social harm than the humble betting shop but there was nothing in the budget to worry them.

Another hit for the gaming sector will come when the Chancellor changes the way the gambling gross profits tax is levied to where the bettor is based rather than where the bookie is based. That should bring the industry back on shore (where it should be) although a debate needs to be had about the rate at which it is levied and how the Government plans to prevent illegal betting sites from out-competing legitimate rivals.

In the meantime, austerity rules. The deficit needs to be cut but it remains to be seen how quickly today's measures will filter through to the help economy grow and thus speed that up. And whether they amount to enough.

We are in for a long haul, in the view of most of the commentary I have seen today. The question is how long. If the average voter still feels insecure, unhappy and poor at the next election historians might yet look at this budget as the beginning of the end for Mr Osborne.

Unless of course he resorts to an old Tory trick: cooking up a massive give away just before that election is held. Watch this space.

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