Labour Budget boosts start-up opportunities

The number of agency breakaways and start-ups could be boosted by the extra help being given to risk-taking entrepreneurs in Chancellor Gordon Brown’s Budget.

The number of agency breakaways and start-ups could be boosted by

the extra help being given to risk-taking entrepreneurs in Chancellor

Gordon Brown’s Budget.



New tax breaks, cuts in corporation tax for small businesses and help

with the introduction of high-tech facilities may lead to a new wave of

agency executives prepared to go it alone, some industry observers

believe.



Richard Hytner, the chief executive of Publicis, said: ’The Budget could

certainly encourage some breakaways. The time for small businesses

appears to have come.’



Nick Phillips, the director-general of the Institute of Practitioners in

Advertising, said the consolidation of more client business -

particularly at international level - mitigated against agency

start-ups. But he added: ’At the other end of the market, there is

always room for niche players - and Brown’s Budget could help them.’



Meanwhile, senior industry figures believe that, although the Budget is

a fairly neutral one, it has helped sustain consumer confidence and

eased the threat of cuts in adspends.



William Eccleshare, the chairman of Ammirati Puris Lintas, said: ’I

suspect it will boost consumer confidence and will stop us talking

ourselves into recession. Three months ago we thought it was going to be

a tough year. Now, in many of our businesses, we see no signs of

panic.’



Michael Bungey, the chairman of Bates Worldwide, said: ’It’s been a

’steady-as-you-go’ Budget which is what the economy needed. It should

see people through any economic downturn. I don’t see any downside to

it.’



Some senior executives believe the Chancellor’s new tax credits will

have a healthy impact on the ad budgets of major retailers. Meanwhile,

the 17.5p price rise on a packet of cigarettes is not thought likely to

effect promotional budgets of tobacco manufacturers already under

pressure from upcoming legislation.



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