I was in London yesterday, and then meetings all day today, so I'm only now getting a moment to blog about the budget and my views about its impact on entrepreneurs.

I received the first headlines from news sites on my PDA as the speech was ongoing, but then, as soon as the chancellor sits down,the Treasury news-machine gears up and press releases start arriving by email with more details.

My initial impression was that it was impossible to believe it was a budget from a socialist chancellor. This was a budget aimed squarely at the middle-income middle-England. Anyone at the lower end of the income scale is going to be worse off.

From the entrepreneur's point of view it also seems to be start-up and growing businesses that will be worse off:

  1. Corporation tax has been cut from 30p to 28p in the pound (this won't happen until next year).
  2. The small companies rate is to be raised to 22p in the pound by 2009, stepped up by 1p each year.
  3. The chancellor claims this increase for small companies will be offset by credits on capital expenditure - but this will only be on the first £50k of any such investment, and other capital allowances will be cut back.

The companies that will benefit most from this budget? Large financial organisations that don't require a lot of capital expenditure, but make a lot of profit. Needy organisations like the banks and insurance companies. I bet you're glad that your taxes are being re-distributed to these poor, unfortunate organisations whose billion pound profits have been slightly dented by having to repay fees they shouldn't havce charged you and policies they shouldn't have sold you. At least we know they'll be better off again now. Phew.

Some small business owners, who run lifestyle businesses as sole-traders or partnerships will also get the benefit of the cut in income tax.

But it looks like entrepreneurs with ambition are getting a bit of a raw deal. These people plan to build bigger businesses, creating jobs in their local communities, and the limited company is the best vehicle to do this. Last year Mr Brown scrapped the 10p rate of corporation tax, which was a benefit to many whose businesses were just making it into profit, and this year he's putting up the small companies rate by 2p.

Now, of course, I believe that real entrepreneurs just get on and start businesses regardless of the rates of tax or other legislation - but I make all these comments because Gordon Brown has tried to claim he is a champion of enterprise. I think he will find it a little difficult to be taken seriously when he makes such claims in the future.

(By the way, I met Gordon Brown a while back, and just want to add that if you have ever seen Rory Bremner doing his impression of Gordon Brown in which he gyrates his chin alot as he talks, then it is very disconcerting to meet the chancellor in person. He actually does do the whole chin-wiggle thing, and I found it very difficult to focus on anything else.)