Autumn Statement addresses key business concerns
Commenting on the Autumn Statement, delivered today by the Chancellor of the Exchequer, John Longworth, Director General of the British Chambers of Commerce (BCC) said:
“The Chancellor has used the last Autumn Statement before the election to demonstrate that he is listening to and supporting British businesses across the entire country. By focusing on key business priorities, such as Britain’s broken business rates system and the difficulty of accessing finance for growth, the Chancellor has demonstrated that he is committed to solving problems that hinder the growth aspirations of many firms.
“Businesses will be pleased that the Chancellor has committed the government to a fundamental review of business rates. This iniquitous tax is sapping good companies’ strength year after year, long before they make a single penny in profits. The review must deliver fundamental change to the business rates system. Tinkering at the edges is simply not acceptable when good companies have to scale back their growth ambitions because of out of control rates bills.
“The government has listened to our calls to improve conditions for business growth. However, the government must ensure that the positive proposals announced in the Autumn Statement do not get bogged down by short-term political thinking, Whitehall bureaucracy and treacle in the banking sector. We will be watching to ensure that the promises made become a reality and deliver real change for British business, despite the climate of fiscal constraint.”
Commenting on the latest forecasts published by the Office for Budget Responsibility, published today in conjunction with the Chancellor’s Autumn Statement, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:
“The new forecast confirms our view that the UK economy will grow at a good pace this year. The 3.0% growth forecast for this year is realistic, but the speed with which the economy slows in the OBR forecast is disappointing. While some slowdown may be unavoidable in the face of global headwinds, particularly the eurozone, the UK should still be able to perform well in the next few years, as long as the right policies are pursued.
“On the public finances the OBR rightly acknowledged that the shortfall in the economy’s ability to generate tax receipts is not a temporary problem, but one that is likely to persist over the medium term. We support the Chancellor’s decision to tighten spending further, but not at the cost of business growth.”
ADDITIONAL COMMENT ON SPECIFIC MEASURES ANNOUNCED IN THE AUTUMN STATEMENT
ON BUSINESS RATES:
“Businesses will be encouraged by the government’s continued efforts to curb business rate increases. Firms will also be pleased to hear the Chancellor announce a review into the future structure of Britain’s business rates system. This iniquitous tax is the highest in Europe and a drag anchor on investment and growth.
“However, unlike previous attempts this review must deliver fundamental change to the business rates system. As called for in our Business Manifesto, businesses will not tolerate anything less than a full root and branch review. We look forward to working closely with the government to help reform Britain’s broken business rates system.”
ON ACCESS TO FINANCE:
“For too long young, high-growth firms and business that have a need for working capital have been frozen out of access to finance. The extension of the Funding for Lending scheme and Enterprise Finance Guarantee Scheme shows that the Chancellor is listening to businesses continued frustration with tight credit conditions. Still, much will depend on lenders’ appetite for risk. The success of this announcement will be measured by whether credit is flowing to small and medium-sized businesses.
“More must also be done to increase access to bond and equity markets for businesses of different sizes. We welcome additional funding to the business bank’s venture capital programme, but this must not result in entrepreneur involuntarily losing control of their businesses before they are able to grow to become mid-sized and should not be the only source of long term, patient capital.”
“It is encouraging to see the Chancellor announce much needed support for UK exporters. British firms need all the help they can get when looking to trade overseas and the announcement today will boost business confidence and help more companies break into new and emerging markets.
“While more still needs to be done, this announcement is reassurance from the government of the importance of driving export growth and rebalancing the economy over the months and years ahead. It is remains to be seen whether investing more in existing programmes will produce an increase in exports. ”
“Abolishing employer’s National Insurance for young apprentices will encourage many businesses to hire them, by reducing the costs of employment and additional training. Our research shows that 54% of firms say funding for training and support would encourage them to hire more young people, which is why we have called for increased financial support for employers hiring apprentices.
“However, some consideration must be made for companies who keep young people on beyond their apprenticeship, at which point full National Insurance Contributions would kick in. The government should consider introducing a taper to smooth this transition.”
ON AIR PASSENGER DUTY:
“While the government has taken steps to reform air passenger duty, they need to go much further to ensure that businesses are not put at a disadvantage when conducting business abroad. By establishing the true impact of air passenger duty on the economy, we will be able to determine if this tax should be significantly reduced or abolished.”
ON SHALE GAS:
“The UK must maximise its shale gas resources to ensure future energy security, economic growth and create employment opportunities. The government is right to explore measures that help to ensure local communities benefit from shale gas extraction. Our Autumn Statement submission called for measures to ensure shale gas is part of a long term energy security strategy.”