What can HR expect from the 2011 Budget?

We canvass the views of professional organisations and HR bloggers on what can be expected from the 2011 Budget, which Chancellor George Osborne will deliver on 23 March 2011.

Chancellor George Osborne is set to deliver his 2011 Budget two weeks today, on Wednesday 23 March 2011. Using a term redolent of New Labour, Osborne has promised a "budget for growth," with a "growth review" expected to accompany the 2011 Budget.

Here we look at what might be expected from the 2011 Budget.

We have canvassed the views of a selection of commentators and bloggers as to their expectations for the 2011 Budget (detailing the announcements they would like to see made, and/or the announcements they expect we will get) .

The following individuals provide their responses to these questions (presented in alphabetical order):

The HRD
Redundant Public Servant
Rick (Flip Chart Fairy Tales)
Mark Swift (EEF)

We additionally present links to 2011 Budget submissions and recommendations from the following professional bodies (again in alphabetical order): BCC; BRC; CBI; and EEF.

Osborne on the 2011 Budget: 'The future favours the bold'

Chancellor George Osborne stated in his speech to the World Economic Forum at Davos on 28 January 2011 that a crucial part of "our vision for growth is a war on all the barriers that stop your businesses expanding, investing and taking new people on." He said that the 2011 Budget will play a crucial role in this war.

Osborne also said:

The ambition of my Budget on 23 March will be to turn the tide on the forces of stagnation. And the guiding principle as I put the Budget together will be: the future favours the bold.

Cameron on the 2011 Budget: No Plan 'B'

Discussing the 2011 Budget in a recent Telegraph interview, Prime Minister David Cameron ruled out both tax cuts and an economic Plan 'B':

The most important thing is to pursue properly plan A. That is to deal with the deficit, yes, but also to have a clear set of measures to help encourage the private sector to grow. And that is what we're doing. [...] to deliver what we have talked about, which is deficit reduction, and pro-growth policies.

Cameron expanded on what the latter might mean in his speech to the Conservative conference in Cardiff on Sunday 6 March 2011, in which he stated:

I can announce today that we are taking on the enemies of enterprise.

The Prime Minister identifies these "enemies of enterprise" as threefold: "bureaucrats in Government departments [...] town hall officials [and] public sector procurement managers."

He also took the opportunity to promise a "fundamental rebalancing of our economy", with "less debt, more saving; less borrowing, more investment; less dependence on financial services, more new industries, exports and trade".

Cable on the 2011 Budget: 'Vigorous, targeted action'

In his Mansion House speech on Thursday 3 March 2011, Business Secretary Vince Cable promised that the 2011 Budget would bring "vigorous, targeted action where the Government can make a difference; combined with robust and unsentimental withdrawal from unnecessary interference." The Guardian reports:

Cable insisted that the 'growth review' has been as rigorous as George Osborne's cost-cutting spending review last autumn. He said the Government would be taking action on boosting overseas trade to economies such as India and China; cutting red tape; improving infrastructure, and freeing up Britain's planning system."

The HRD on the 2011 Budget: 'Let's man up here'

These are the final written words from anonymous blogger the HRD (a UK HR director), something of a postscript to the closure last week of his My Hell Is Other People blog.

The Conservative party conference gave Gideon Osborne a chance to trail the general themes that he wants us to take away from the 2011 Budget. Freeing up business to invest in growth, unshackling enterprise to rock its general wonderfulness. And of course it would be inopportune to miss the chance to have a further pop at the imperilled public sector in the process; the people that are getting in the way of entrepreneurialism. David Cameron did the honours:
Every regulator, every official, every bureaucrat in Government has got to understand that we cannot afford to keep loading costs onto business because frankly they cannot take it any more.
I can't disagree with the sentiments. Logically if we are going to retract our public sector then we need private enterprise to step in and provide the growth that our economy needs to prevent us from remaining in this economic quagmire. Or worse, sinking further in. But let's man up here... that requires a hell of a lot more than rhetoric.

To create jobs we need real investment in the market sectors that Britain can be strong in now and in the future. We need to invest in the knowledge economy, in creative industries, in R&D. We need to develop a mixed economy. Thinking ahead in terms of education, skills and training. But perhaps most importantly we need to understand that the burden of tax on businesses MUST be reduced, bravely and quickly.

There is no genuine value behind "job creation" schemes or incentives, they don't lead to a step change in the labour market. Instead we need to create an environment that supports business growth, entrepreneurialism and innovation. This - combined with balanced employment legislation, that understands that businesses need flexibility to remain competitive but also protects workers from unfair treatment, and ensures that we are creating "good" work - is the way forward..

I worry that the 2011 Budget will be a display of bravado, a show of phallic self-importance rather than the economic shot in the arm that is required. The coalition has an opportunity to show they are not the Rizla Government, paper thin, fragile and disposable. Are they big enough to step up into that space? I hope so, but for now the jury is still out.

Redundant Public Servant on the 2011 Budget: 'The biggest problem is growth, or lack of it'

Redundant Public Servant is a former public servant (and HR professional) who has recently been made redundant from his role. He is the author of A redundant public servant's blog - described as "news from the front line of deficit reduction."He has recently been able to share some very good news indeed via the Patrick Butler's Cuts Blog (on the Guardian website).

What would you like to see George Osborne announce in the 2011 Budget?
The biggest problem our economy faces is growth or the lack of it. There are two interconnected issues at work. The first is physical and to do with tax, infrastructure and so on. The second is psychological. People believe the Government when it says there is no money and they are paying down debt, reducing spending and saving. Actions that suck life out of a recovery.

I would like the 2011 Budget to see action in three areas to tackle both sides of the problems we face.
Tax: I'd like to see two policy areas pursued. First a simplification of the tax code accompanied by an aggressive closure of loop-holes and avoidance schemes. The proportion of gross profit paid in tax should be included as a key indicator in public reporting of financial results. Let's have some real corporate transparency. Second let's reduce the tax burden on companies in areas where new inward investment is needed. This would ensure economic growth is more evenly spread.
Financial industry reform: I'd like to see a dose of reform here to shake the 'business as usual' complacency of this sector, including more assertive regulation, ring-fencing of high risk activities and an encouragement of more mutual forms of financial services. We could all too easily be back in crisis without action.
Housing: Too many fellow citizens live in poor quality, yet paradoxically costly housing. Our national obsession with property has driven us down a cul-de-sac. I'd like to see a sustained campaign of social house-building either directly or through incentives to the private sector. The psychological impact of such a bold move would help transform the national mood.
What do you expect that George Osborne will announce in the 2011 Budget?
None of the above. Sadly.

Rick (Flip Chart Fairy Tales) on the 2011 Budget: 'Ease up on the spending cuts'

Rick is the pseudonymous author of the Flip Chart Fairy Tales blog.

What would you like to see George Osborne announce in the 2011 Budget?
I'd like to see George Obsorne ease up on the spending cuts. The UK needs to reduce its deficit and, over the longer term, the current model of public service provision and welfare provision is probably unsustainable. But taking £81bn out of the economy in four years is unnecessary and counterproductive.

Over half a million public servants means half a million fewer people paying tax and buying goods and services. Those businesses wholly or partly dependent on the public sector will see a reduction in demand which will also have a knock-on effect on unemployment, depressing demand still further. There have been a couple of months recently when the public finances have shown a surplus. This has not been due to reduced public spending but to increases in receipts from income and corporation tax. Take £81bn out of the economy during a period of very weak growth and a lot of that tax will disappear.

Slowing the rate of spending cuts will also give public sector bodies more time to plan and implement spending cuts. Reform of the public sector is overdue but cutting at such speed runs the risk of creating organisations which are 15% to 20% smaller but just as inefficient. Investing to save is more likely to create a public sector fit for the future than simply slashing and burning.

What do you expect that George Osborne will announce in the 2011 Budget?
It is very unlikely that Mr Osborne will reduce the speed and scale of spending cuts. Failing that, I'd like to see more help directed towards small- and medium-sized businesses. These are the organisations which are most likely to create the jobs and, critically for public debt reduction, the growth in tax receipts over the next few years. Start-ups are important too but most will not deliver significant revenue until later in the decade.

Given the state of the public finances, even targeted tax reduction is unlikely. I'm sceptical about the promised war on red tape too. Governments have been promising that for as long as I can remember. Bonfires of regulations are rather like bonfires of quangos; there is a lot of noise and smoke but very little actually gets burnt.

The £100m for enterprise zones and the extra money for business promised by Project Merlin are encouraging signs but we have yet to see the detail and many business leaders are sceptical about how much either of these measures will actually deliver.
Whatever the Chancellor does to help business create jobs will be small fry compared to the effects of the spending cuts. You can't counteract the removal of £81bn with the injection of a few hundred million pounds. The best help George Osborne could give to business would be to reduce the rate at which he takes money out of the economy. That would keep demand up and give businesses time to recover. Alas, that looks increasingly unlikely. All we can expect, therefore, is a few scraps from the Chancellor's table but no real meat.

Mark Swift (EEF) on the 2011 Budget: 'There are no quick fixes'

Mark Swift is head of media relations at EEF, the manufacturers' organisation. You can read his blog posts here. A link to the 2011 Budget submission from the EEF can be found in the final section of this article.

The challenge we face as a nation is not only whether we can grow our economy, but whether we can do so in a sustainable manner. To achieve real change, the Government needs a growth strategy that sets a strategic framework for the economy it is trying to create and how it will achieve it. The strategy must facilitate long-term investment in areas such as skills, technologies and our national infrastructure to ensure the productive potential of our economy can be realised.

There are no quick fixes, but in the Budget it is critical that we see priority given to the following areas.

Firstly, the Government has made a bold promise that for every new piece of regulation introduced, one of equal impact will be removed. This must not become a dry accounting exercise but a new approach where Ministers can make their name and enhance their reputation just as much by what they have removed rather than added to the statute book.

Secondly, the forthcoming Budget will be a major opportunity to set out a cross-Government approach to climate change and the identification of the business opportunities associated with the low carbon economy.

Thirdly, access to finance remains a key concern for companies. Government needs to accelerate progress on improving the availability of finance by increasing competition between the banks and ensuring their lending policies are more transparent.

Finally, Government should address the skills gap by creating a market in which only skills providers which respond to the needs of customers get public funding.

These four priorities are part of the longer-term push to create a more balanced economy. The Growth Review represents a welcome approach by Government to achieve this goal but, it now is vital that Government sets out a convincing set of policies and supporting plans that will help in the creation of growth and jobs we need.

Budget submissions from professional organisations: