But what does it mean for the rest of us and how could it affect the economy and the recruitment industry in general?
In broad terms, George Osborne has tried his best with the limited tools at his disposal. He confirmed the Government’s fiscal policy of intending to eliminate the structural deficit by 2014, and he also stated that borrowing for 2011-2012 is marginally better than originally forecast, coming in at £126 billion.
The increase in personal allowance to £9,205 from 2013 is a big feather in the cap for the Lib Dems and will be a popular measure for people in employment.
But it’s the ‘Granny Tax’ that will take the headlines (mainly because the good stuff had been allegedly leaked to the media ), as tabloids and broadsheets alike sensationalised the fact that GO has paid for the new economic stimulus by ‘robbing pensioners’. Or so they’d have you believe, which is something Osborne of course vehemently denies.
In truth the Budget was a bit of a damp squib and pretty neutral in its outlook. Tax cuts were balanced by tax rises, but what was clear from it was that the Government wants to create an environment in the UK in which business can grow and thrive.
It’s clear they want the UK to have the best tax regime in the G20 and they firmly want to hang the ‘open for business’ sign up to any foreign investment.
That can only be a good thing surely?
The last few years have been incredibly tough for business. 2008/2009 was a killer period for many, with a lot of businesses going to the wall during the recession.
The recruitment industry is generally a barometer for how the economy is performing. In a job-poor, candidate-rich period, the economy is generally struggling, and in times of economic prosperity you find jobs easy to come by and sourcing decent talent then becomes a key issue.
What we’ve noticed in the online recruitment industry since that period is that companies have generally learned lots of lessons since the recession. We find more than ever that every pound is measured for return on investment, and people generally have been cautious as to where they spend their money.
It’s one of the reasons why the flat-fee online recruitment model has become so popular. More and more companies are seeing the real value in taking control of their online recruitment, and aligning their recruitment strategy with job boards AND social media. In our industry it’s the reduction of cost-per-hire that is driving the online recruitment revolution, but I’m sure such scrutiny on value for money isn’t restricted to one individual sector.
This budget should hopefully help the general economy and by consequence, the recruitment industry as a whole. It’s a virtuous circle with the more money there is in the system, the more jobs will be created and so on.
However, the concerning thing for Government is that this level of caution, malaise and general fear of the Eurozone tipping us back into a recession is halting the country’s economic growth.
I’m not suggesting for one second that companies should become the reckless enterprises that thrived in the noughties, but the lack of credit, length of time it takes to make a decision and general wariness of the outlook is having a negative knock-on effect for the economy.
It’s a very delicate balance.
The reduction in corporation tax rates is a big plus for business and is an obvious measure to counter this.
As a business owner myself, I question why we pay so much in tax as it genuinely stunts our growth and (in my opinion) is counter-productive as it can put companies off recruiting new people. Which as a recruitment company, we feel on both sides of the table!
Companies want to recruit – they’re just afraid to do so.
The day they remove employers NI, or as Digby Jones called it yesterday, the tax on jobs, the government will see a big growth spurt. That will take a lot of courage and undoubted rantings and ravings from the socialist elements of society.
Finally, one area I would have liked to have seen reviewed was fuel duty. I’m guessing the government rely on the increases in duty on fuel, alcohol and tobacco as an ‘easy’ way of plugging some tax gaps, much in the same way that local councils will increase your Council Tax or car parking charges if they have a financial black hole.
But I would have like to have seen a 3 year freeze on fuel duty (or even a reverse) in an attempt to put money back into people’s pockets and get the economy stimulated in a more direct, obvious way.
So there you go. Another year, and another set of tax rises/cuts and your view on whether you like what you’ve heard will be directly influenced by how much it affects you. Let’s see if it works and if so, then maybe this time next year, we’ll all be millionaires Rodney…..