Business leaders have welcomed the UK government's new £65bn ($91bn) coronavirus support package in the 2021 budget, but warned major gaps remain in support for companies and workers.
The chancellor Rishi Sunak said he would do "whatever it takes" to support the UK economy in his speech on Wednesday, and unveiled upgraded forecasts for economic recovery.
Industry chiefs said new measures would be a "vital cushion" for struggling companies hobbled by the ongoing lockdown, but also highlighted many policies on companies' wishlists the chancellor had failed to deliver.
Most business chiefs said many companies would be relieved to see crisis support measures extended or replaced with new schemes, including furlough wage subsidies, government-backed loans, and grants, business rate and VAT cuts for hard-hit sectors. Newly self-employed workers will also be eligible for income grants for the first time.
“Thousands of firms will be relieved to receive support to finish the job and get through the coming months," said Tony Danker, director-general of the Confederation of British Industry (CBI).
Struggling companies are unlikely to feel like winners as they continue to battle an unprecedented crisis, but stock market reaction suggested support could prove a vital lifeline.
Premier Inn owner Whitbread (WTB.L) and British Airways owner IAG (IAG.L) were among the biggest risers on the London Stock Exchange on Wednesday, up 5.5% and 6% respectively. Pub group JD Wetherspoon (JDW.L) closed 5.7% higher, and Cineworld (CINE.L) was 8% higher.
Andrew Batchelor, general manager of the luxury Landmark London hotel, said the furlough scheme's extension was "extremely positive," as not all his staff will be able to return to work immediately as restrictions ease and it reopens. VAT cuts for hospitality will also help it keep down costs, he added.
WATCH: What support measures were unveiled in the 2021 budget?
Meanwhile the property industry, from housebuilders to estate agents to lawyers to lenders, are set to benefit from an extended stamp duty holiday and government guarantees for low-deposit mortgages. Developers Persimmon (PSN.L), Barratt (BDEV.L) and Taylor Wimpey (TW.L) were also among the biggest risers on the FTSE 100, each up more than 5%.
The property tax cuts are designed to fuel wider economic activity, with companies from home furnishing and DIY retailers to building suppliers also likely to benefit from more home moves.
Car and alcohol retailers will welcome a separate decision to freeze duties on fuel, beer, whisky and wine.
One of the big surprise announcements was a corporation tax "super-deduction," allowing companies to reduce their tax bill by 130% on investment. It could see UK industry benefit to the tune of £25bn, according to the Treasury, and the CBI's Danker said it would be a "real catalyst" for investment.
Adam Sopher, co-founder of gourmet popcorn maker Joe & Seph's, said he hoped it would allow the company to bring in new machinery and introduce new products faster than previously planned. Shares in telecoms giant BT leapt 6.4% and the blue-chip FTSE 250 (^FTMC) also rose 1.2% to a year-high on the news.
Many business leaders voiced their frustration at groups missing out on support and some more controversial measures, however.
The CBI's chief economist Rain Newton-Smith noted a continued imbalance between help for shuttered retail, travel and hospitality companies and their suppliers. "There is still little support for businesses in their supply chains who don’t qualify automatically and will have to apply for a smaller pool of support."
"Directors, who appear to have been left out yet again, will be incredibly disappointed," said the Federation of Small Business' chairman Mike Cherry. The group and others have lobbied for help for business chiefs paid mainly or solely through dividends, which are not eligible for furlough wage subsidies to replace lost earnings.
The Institute of Directors' director-general Jonathan Geldart also said the government had "missed a trick" by not helping such leaders. Other groups including some of the self-employed remain ineligible for income schemes.
The FSB also argued there was "little here to aid job creation or help people return to work," a message echoed by the recruitment industry.
Recruitment & Employment Confederation (REC) chief executive Neil Carberry said the government should have slashed employer national insurance contributions, dubbing them a "tax on jobs," and better improved the apprenticeship levy so it "supports rather than hinders training."
Several business chiefs were unimpressed by plans to hike corporation tax from 2023, with larger and more profitable businesses facing a 25% tax on profits. “A higher corporate tax rate will discourage investment and make the UK less competitive internationally, so it is right that the chancellor has combined it with a new 130% super deduction for investment," said Sam Dumitriu, research director of the Enterpreneurs Network.
Business and union chiefs warned the aviation sector needed more help to survive the crisis, and the Society of Motor Manufacturers & Traders (SMMT) called the budget an "opportunity lost" to help carmakers hit net zero targets.
The SMMT's chief executive Mike Hawes said it was unclear if the investment tax break would "work for manufacturing," while the National Farmers' Union warned not all farmers would be eligible.
Mike Clancy, general secretary of the Prospect union, also argued it was "inexplicable" not to hand government workplace health and safety inspectors extra funds, "to keep the public and our workforce safe and the economy open.”