Pre-budget disappointment

It seems that the pre-budget report has failed to impress. You only need to scan through the responses of business media to see that opinion is certainly not weighted in Darling's favour.

A common thread is that Darling isn't thinking big enough and is instead trying to palm us off with lots of little and therefore ineffectual measures. As Matthew Gwyther from Management Today states: "For an event that had the potential to be one of the more seismic economic policy announcements of the 21st Century, it was about as much fun as doing your tax return. And rather less rewarding. Where was the stirring rhetoric, the grand gesture, the bold decision making?"

This disappointment is echoed by Marc Barber of smallbusiness.co.uk, who expresses concern that the 50% tax on bankers' bonuses is more of a gesture to keep the tax payer at bay, rather than a move that will have any great impact. He says: "It seems this decision was designed to assuage voters’ anger at the fat cats clawing at our money, although it is more useful as a deterrent to the bonus culture than a serious effort to offset our debt."

There is also much criticism of the 0.5% increase in National Insurance, seen to be yet another slap in the face for the self-employed and smaller businesses. And of course speculation is rife that delaying cuts on public spending is a pre-election tactic, that as one blogger accuses: "...leaves this for the next government to deal with."

While I'm tempted to agree with many of these sentiments: yes, taxing bankers' bonuses doesn't address the root cause of the financial crisis; no, increasing VAT and National Insurance is unlikely to help small businesses, I wouldn't want to go all out and jump on the 'bash the budget' bandwagon.

As Marc Barber concedes, Darling has kept to his promises and included measures to help small businesses, including the deferral of the 1p corporation tax rise and the ‘time to pay’ scheme. The measures are there, it would just take nothing short of a miracle to satisy all the talking heads in the middle of a recession. Surely, even if Darling gave his own home to drive money back into the economy, it wouldn't be seen as enough. Coupled with an imminent election, it's no wonder that the cynics are out in force.

This is not to say the report is beyond criticism, far from it. As I've already stated, more could have been done to protect businesses from increases in tax and the banking crisis does seem to be on an endless loop that sickeningly repeats itself. However, from a business perspective, if finances are so tight as to be toppled by a relatively small tax increase, what does this say about your ability to safeguard profit and cash flow? Any business leader worth his or her salt should know that a business will always be subject to external factors, whether that's a slowdown in the market or a tax increase.

Not so long ago, the papers were falling over themselves to proclaim Great Britain a nanny state. But when the chips are down we're all quite happy to demand more hand-outs and berate the government for not doing more for us. You can't have it both ways. The reality is, if you refuse to take the necessary precautions when times are good and/or refuse to adapt to changes in pressure, then maybe you shouldn't be trading full stop.

It's tough love. But someone's got to say it.