One area where George Osborne is under pressure to act tomorrow is the thorny issue of capital allowances.
The chancellor cut these allowances back in 2010 in his first Budget, at the same time cutting corporation tax.
The problem is that many small companies complain they do not benefit from the lower corporation tax rate – and have less incentive to invest because of the allowance cuts.
The Treasury has been under heavy lobbying pressure from groups such as the Engineering Employers Federation and British Chambers of Commerce to conduct a volte face.
Interestingly, the Lib Dems (including Vince Cable) have been persuaded of the merits of this case – although there would be issues around how to pay for a reversal.
In 2010, the annual investment allowance was cut from £100,000 to £25,000 per year (from April 2012) with a cut in the rate from 20 to 18 per cent, or 10 per cent to 8 per cent.
Mr Osborne’s options include raising the annual investment allowance above the current £25,000; raising the m ain capital allowance rate from 18 per cent – or doing something just for SMEs.
The changes could be even more minor than that, with some observers expecting a change limited only to high-tech start-ups or similar.
If he decides to leave the system as it is, however, don’t expect the business lobby to be particularly happy.
Meanwhile another theory I’ve heard is that the chancellor will introduce an exemption from business rates for speculative property developments, such as office blocks, where they remain empty. There have been meetings between officials and the industry on this in recent weeks.
Jim Pickard
Kiran Stacey