Whilst some elements of higher public spending within the 2018 Budget Statement had been trialled at the recent Conservative party conference, many seemed genuinely surprised at the pro-business approach that the Chancellor of the Exchequer adopted earlier this week.
But if you look at the comments afterwards from business representative groups, independent businesses and entrepreneurs, it could be argued that this was a positive budget that was aimed at supporting the UK economy as we are looking to leave the European Union.
There was consistency with previous manifesto commitments, such as the proposed reduction in corporation tax to 17 per cent in April 2020 which many had suggested may not happen if Philip Hammond was to be able to commit money to public services such as the NHS.
But this seemed to form part of a series of measures that would enable UK businesses to be confident in investing in their futures and that of the economy going forward.
An important part of this which was not picked up by the mainstream press was the additional £1.6 billion to strengthen the UK’s global leadership in science and innovation in areas such as smart manufacturing, quantum technologies, nuclear fusion, artificial Intelligence and data-driven innovation.
The Chancellor has also tried to address the lack of investment by businesses due to the uncertainty of Brexit. It has been estimated that British industry is sitting on hundreds of billions of pounds within their balance sheets, money that is being hoarded until there is greater clarity on the direction of the UK economy.
Certainly, by increasing the Annual Investment Allowance (i.e. the tax-free amount that businesses can spend on building and machinery) from £200,000 to £1m for two years from the beginning of next year, this may nudge some firms to make positive investment decisions once we have left the European union.
Another key plank of alleviating the financial pressure on UK businesses and ensuring that they are ready for whatever happens over the next few months was the reduction in business rates. Whilst there had been pressure to do so, few expected that Philip Hammond would be cutting business rates by a third for all retailers with a rateable value of £51,000 or less.
According to the Treasury, this will mean that 90 per cent of all independent shops, pubs, restaurants and cafes will save up to an estimated £8,000 a year. However, this will only apply immediately in England as some elements of fiscal responsibility (including business rates) are now devolved to Wales.
With the Welsh Government receiving around £550 million as a consequential from the budget, it does not have to spend any of this funding on the same priorities although it will come under enormous pressure at ensure that the Welsh high street is as competitive as its equivalent across the border.
Therefore, this was unequivocally a budget that was geared towards preparing UK businesses for the future exit from the European Union.
Of course, whilst we all hope that will be an amicable separation, there are still worries that we may end up with no deal. If that is the case, then I am afraid we will be seeing Philip Hammond again in the spring with an emergency budget that may well be very different to this one.