Latest Business Barometer looks at reactions to the Emergency Budget

Stephen Morse, Head of the Business Group at Michelmores, looks at the responses to the latest Business Barometer.

He got it just about right... That appears to be the overwhelming verdict on Chancellor George Osborne's 'Emergency Budget', as revealed by the latest Western Morning News Business Barometer compiled and analysed by the Michelmores Business Group.

Having said that, the tone of the responses indicate that the majority feel that the measures the Chancellor announced will result in a lot of pain for everyone over the next few years - but they seem to be saying it is a price worth paying.

Over 90% of respondents thought the rise in VAT to 20% is the right course of action to take, even though some, principally those in the retail sector, thought that the severity of the cuts announced so far are already stretching a stagnating retail sector too far.

On the whole the respondents were encouraged by the new rates of Capital Gains Tax, agreed with a levy on the banks, thought the spending cut/taxation ratio of 80:20 pretty much right, and overwhelmingly expressed their satisfaction with the Chancellor's overall package of measures.

So, did he do anything wrong? Not directly, it seems, but the proof, as always, will be in the size and flavour of the pudding he is currently mixing.

Underlying these findings, which the Coalition Government should find encouraging, is a genuine debate on the way forward with questions being raised regarding where the cuts should be made, how quickly, and how deeply, with considered targeting a priority.

Addressing public sector pay and pensions in particular is a current theme in the responses received, and I get the distinct impression that most of our respondents would rather see the axe fall there than on capital projects and crucial infrastructure developments that represent longer term investment, business and employment generating opportunities.

Indeed, those in the construction industry are deeply concerned about the effect that the public sector cuts will have on their industry, where a lack of ongoing available work is already being reported.

There were repeated calls for an extension of the Stamp Duty holiday to kick start the housing market, for a reduction or abolition of Stamp Duty Land Tax to assist the commercial property sector, for a rethink in current planning regimes and for incentives to invest in capital projects - all pointing to a construction led recovery.

This doesn't look likely for a while, and the combination of low levels of consumer and market confidence, coupled with investor caution and the continuing shortage of bank liquidity and lending, all at a time when viable businesses really do need access to credit, are resulting in a fear in the business community that a double dip recession still awaits us.

Behind the responses there does seem to be a recognition and acceptance that we need to do something radical to address the structural imbalances that the new Coalition Government has inherited. That will have adverse consequences for us all, which the respondents seem to be prepared to take, albeit with a collective sigh of resignation.

The flavour of the latest Barometer is one of stoicism rather than pessimism. The responses demonstrate the resilience of the owner-managed businesses that proliferate in the Westcountry, and the work ethic that says let's just get on with it.

While we all know that the light at the end of the tunnel might just be a train coming the other way, what we don't know is whether this 'Emergency Budget' will succeed in addressing the economic difficulties we face. As one respondent said: "We just don't know. We haven't been here before."

Roll on the Autumn Statement and spending review.