What the chancellor's Autumn Statement means to Lancashire businesses
Chancellor George Osborne talked up growth in the UK economy, whilst promising good news for small businesses.
In his Autumn Statement, he revealed that the growth forecast had grown to 3 per cent, up from 2.7 per cent in March. There has been 500,000 new jobs created this year, 85 per cent of which are full-time, and it is hoped that unemployment will fall to 5.4 per cent in 2015.In headline announcements, stamp duty has been revamped, fuel duty frozen, R&D tax credits have been increased, whilst £500m of bank lending plus £400m of government-backed venture capital will be invested in SMEs, and a £45m package of support will be made available to exporters.
Jane Parry, lead tax partner, PM+M"Chancellor George Osborne delivered his Autumn Statement to a mixed response. As always, there will be some winners and some losers from the measures announced. On some of them, the details will only emerge as consultation processes progress.
"In the annual cycle of Spring Budget and Autumn Statement, with measures announced far in advance, it is always challenging to keep track of what is taking effect when. In 2015 that will be amplified by the fact that we have a general election in May, meaning that we are unlikely to have a full Finance Bill in the Spring. Instead we are likely to have a small Finance Bill in the Spring followed by one or even two more later in the year, as happened in 2010. As such, whilst we may have an indication of what is planned to take effect, if we have a change of government in the meantime, we may see some amendments. That can make advance planning challenging for businesses and investors."
Mike Hartley, managing director, Praetura Asset Finance“It’s great to see the government doing more to acknowledge the contributions made by Britain’s growing army of SMEs and taking action to support them. Ensuring that firms can source the best finance is imperative to improving growth and productivity, which is why the coalition’s pledge to invest a further £400m into the British Business Bank’s Enterprise Capital Funds programme is much welcomed.
“The asset finance market, in particular, has risen fivefold over the past decade, as major banks continue to shy away from small business lending. With this in mind, it’s superb to see the chancellor providing further support to boosting alternative finance and strengthening the great work that businesses like Praetura do in enabling firms to get on and grow.”
Tony Medcalf, tax partner, Moore and Smalley“This Autumn Statement has turned out to be an anti-climax for those businesses that were expecting to hear about business rate reform. Granted, the chancellor did cap the inflation-linked increase in business rates at 2 per cent, as he did last year, and he extended the doubling of the small business rate relief to April 2016. There was also a 50 per cent increase in the existing rates discount to help high street shops, pubs and cafes to £1,500 next year.
“While that is welcome, we did not see was any meaningful detail to back up the government’s previous hints at wider reform of the structure of business rates. The only mention of this in the chancellor’s speech was a brief reference to the review that’s already under way and that is not due to report until March 2016, so we haven’t learnt anything new. It could be another two years at least before we see any real changes to the business rates system."
Claire Foreman, deputy principal, Runshaw College“We are hopeful that the pledge to abolish national insurance on young apprentices will inspire more employers to recruit an apprentice as not having to make National Insurance Contributions (NICs) may be a deciding factor as to whether to recruit someone younger or older.
“With unemployment down and ambitions for three million apprentices to be recruited during the next parliament, this announcement is a positive step towards encouraging businesses to bring fresh talent into the company and develop the skilled workers of the future.”
Clive Drinkwater, North West regional director, UKTI“In the North West we have been pushing hard to grow the numbers of first time exporters for some time now, and my new exporter challenge has resulted in the North West region being the only one actually to grow its number of exporting firms. We still need to do considerably better, however, and this new package of support to help new exporters on their international journey is most welcome and will enable us to go faster and further in our quest to inspire a new generation of exporting firms in the region.”
“Apprenticeship funding still hangs in the balance with no clarity offered by the chancellor in the Autumn Statement. We had hoped government would publish its response to the May 2014 consultation on funding reforms for apprenticeships but as things stand, we are no closer to understanding if ministers have taken heed of our advice and decided to review their ill-conceived proposals.
“Like many organisations which represent SMEs, we have warned the government that if it implements its apprenticeship funding reforms as proposed, they will greatly detract from the ability and desire of small firms to train apprentices. As two-thirds of all construction apprentices are trained by micro-businesses – that is the very smallest of firms – this is extremely concerning. Although we welcome the abolition of employers’ National Insurance contributions on earnings up to the upper earnings limit for apprentices aged under 25, what we really need to hear is an alternative way forward for SME apprenticeship funding. Perhaps government has decided to kick the issue into the long grass in which case I urge Ministers to respond as soon as possible – uncertainty around apprenticeship policy is the last thing our industry needs when facing an ever-growing skills gap.”
John Cridland, director-general, CBI “The major changes on stamp duty and business rates will be a shot in the arm for families and growing firms as they look towards 2015.
“The targeted focus on enterprise is right, but business innovators would have liked to see more on research and development to boost UK investment. We welcome the continued commitment to deficit reduction, but real challenges lie ahead to reduce future public spending, and fresh thinking on public services will be essential. In the long term, growth is about people, science and infrastructure, and we warmly welcome the financial support for postgraduate science students.”
Colin Tice, tax partner, Cassons"George Osborne’s Autumn Statement seemed heavy on rhetoric but light on real measures, perhaps in anticipation of next year’s election. The UK economy is growing at a rate greater than much of the competition and the rate of borrowing is forecast to reduce – there may actually be a surplus in 2018/19.
"Emphasis was placed on the “Northern Powerhouse”, an attempt to generate growth and employment in the northern regions. Northern cities need to be linked with strong transport connections and tenders are invited for the next Northern and Trans-Pennine Express rail franchises and investment in road infrastructure. In a drive to become the world leader in science and technology, £235m is to be invested in a new Sir Henry Royce Institute for advanced materials research and innovation based in Manchester. (Sir Henry Royce was based in Manchester and famously met Charles Rolls in the Midland Hotel in Manchester). To enhance the cultural environment, the Government will contribute £78m to Manchester’s new theatre and exhibition space – The Factory Manchester, to be located at the old Granada Studios and with reference to Factory Records the Manchester-based independent record label, prominent in the 1980s."These measures may appear Manchester-centric, but other cities can and will benefit. It is very probable that surrounding areas will also benefit, directly or indirectly. These must be regarded as very positive proposals."
Mark Schofield, director, Haworths Chartered Accountants
"With a general election looming in Spring 2015, the Autumn statement was very much a presentation of everything good the government has delivered since the coalition was brought into power four years ago.
"The statement promotes growth, aspiration and ambition to build upon, what seems to be, a more resilient economy. As with the budget earlier this year, the emphasis is on supporting savers, and investing in manufacturing and exports. All of which is good news for the region. “Following on from the budget, the Autumn Statement reflects the government’s message that it will support manufacturing and growth. What is good news is the commitment to Apprenticeship schemes, which will certainly help address the skills shortage in this country.”
