Everyone was looking for something different from the UK Budget. George Osborne wanted to make the headlines with some positive uplifting news that may help stimulate consumer sentiment, business and their ratings whilst Messrs Miliband and Balls, increasingly looked like meat starved piranhas knowing lunch was to be served at 12:30 on Wednesday 21st March. Even the shortest of statements was likely to expose some raw flesh which could be punctured by their teeth marks within hours of the speech terminating. Workers and their families on the other hand largely appear to have had enough of politics and simply wanted to see some signs of relief from the ongoing austerity drive and unrelenting hikes in food and energy prices which increasingly appear to be the excuse for rates of inflation that had been consigned to the history books. Finally, Manx residents will have been hoping Mr Osborne would not do anything that would have a material impact on their pocket as a result of a tax or duty hike although realistically the IoM Treasury probably relishes such occasions as more money flows into their coffers and local politicians can easily distance themselves from the blame. The occasion only lived up to some expectations but there was no doubt left in the electorate’s mind that the Chancellor is a ‘Conservative’ and the accumulation of bureaucracy and red tape built up over the past decade will be cut whilst at the same time new business initiatives are planned and launched. The deficit reduction plan remains on course and although growth expectations were downgraded over the near term it would increasingly appear that the UK is going to make a major and significant bid to attract international business as corporation tax is ultimately cut to 23% and 21 new enterprise zones backed by tax incentives are created. Ordinary working people were not forgotten either. Personal tax allowances were increased (unlike the Isle of Man), the higher 50p rate of tax confirmed as temporary and Labour’s fuel duty escalators abandoned whilst oil prices remain high. Indeed he was even able to offer a 1p cut in the price of fuel benefiting motorists and industry but hitting North Sea oil producers. The opposition were left with little to get their teeth into other than the growth downgrade. From an Isle of Man perspective there is no doubt a healthy and vibrant UK will be a great benefit to us, however we should be thankful it has a large deficit that requires funding otherwise our closest neighbour could become a serious competitor as taxes would have been slashed more aggressively. The Isle of Man must wake up to the fact competition between us and our nearest neighbour could become fierce and this new Coalition Government (with more than a hint of blue) appears hungry to succeed. The Channel Islands will be negatively impacted by Mr Osborne’s planned change in legislation affecting retailers storing goods offshore and within hours of the pro-business budget, WPP indicated its intention to leave the Rep of Ireland and return to the UK. It could be us next year should they launch some other new business initiative so we must up the ante now. The UK is without doubt opening up for business once again and the days of Labour bullying offshore regions are over. This looks like raw, level playing field competition where the fittest survive and from our perspective it is fortunate the deficit limits the UK’s scope to manoeuvre for the time being. Paul Crocker is Senior Investment Manager at IOMA Investment Management part of the IOMA Group, which offers a full range of investment solutions. For more information call 681 307. IOMA Fund and Investment Management Limited trading as IOMA Investment Management is licensed by the Isle of Man Financial Supervision Commission. -ends-