Autumn Statement 2016: Entrepreneur reactions
Following chancellor Philip Hammond's first Autumn Statement, entrepreneurs share what they think of his policy announcements...
Exactly five months on from the EU Referendum, chancellor Philip Hammond explained that while anticipating tougher times in 2017, the government plans to develop the economy’s existing strengths with a view to building “a country that works for everyone”.
With an emphasis on increasing the country’s productivity, Hammond announced a £23bn productivity investment fund, plans to fund the boosting of management skills, and the injection £400m into venture capital funds, unblocking £1bn of new investment for small businesses.
Other announcements included a 17% cut in corporation tax and the increase of the National Living Wage from £7.20 to £7.50.
Hammond’s priority as chancellor, he stated, is to ensure that “Britain remains the number one destination for business”.
Here’s what entrepreneurs thought of the policy announcements…
On the £1bn investment in the UK’s digital infrastructure…
Tim Sawyer, CEO of Start Up Loans, said:
“The chancellor’s pledge to increase investment in digital infrastructure will be welcomed by the start-up community, and it’s encouraging to see an issue so high on the agenda for microbusinesses be addressed head on in today’s announcement. So many ventures are launched from home and the lack of access to hyper-fast broadband, especially in more rural areas, is a barrier to growth for many start-ups who need to be able to keep up with their larger peers in a highly competitive digitised economy.”
Matt Clifford MBE, co-founder of Entrepreneur First, added:
“This Autumn Statement is good news for the UK’s technology industry. £1bn will be invested in digital infrastructure which underpins the importance of technology to the UK’s economy.
“By investing an extra £2bn per year in research and development into technologies such as robotics and biotechnology, the government is helping to support the pioneers of new industries that are playing a major part in Britain’s long-term global competitiveness.
“By taking this opportunity to prove its commitment to small technology businesses, the new administration is putting measures in place to take advantage of the ‘once-in-a-generation’ opportunity for Britain to cement its role as a leader in tech innovation. A position further underlined with news of the further cuts in corporation tax and tax free personal allowance – moves that will not only encourage the thriving companies being created in the UK to stay here, creating jobs and wealth in the process, but one that can help them flourish by freeing up much-needed capital for innovation and growth.”
On the positive forecast for the labour market…
Lee Biggins, founder and managing director of CV-Library, commented:
“The chancellor’s optimistic outlook on the UK’s labour market is extremely positive to see. Most notably, the UK labour market is forecast to remain robust and to grow every year up until 2020, confirming business confidence across the UK. Our own data confirms this: in the months following the Brexit (July 2016 – October 2016, inclusive) we found that job postings actually increased by 7% on the previous year, while applications and salaries also rose by a steady 2.4% respectively.
“With investments being made in the UK’s house building, transport infrastructure and science sectors, we should see job creation boost in these areas, bringing about new opportunities for workers all over the UK.”
On the increasing National Living Wage…
Neil Pickering, marketing and industry insights manager at Kronos, said:
“Our research shows the majority of UK workers thought the pressure from Brexit would mean the Living Wage would at best remain the same, rather than rise in accordance with legislation, so Philip Hammond’s announcement at 12.30pm comes as a welcome surprise.
“However, this increase will continue to pose a challenge to employers who will again have to look for further efficiencies to cover the additional cost to their business, when margins are coming under pressure for other reasons. There are also the specific challenges, for example if London is awarded a higher National Living Wage than the rest of the UK, that would further complicate the process of payroll management for organisations with London based employees working alongside others based outside the city.”
On the continued cancellation of the fuel duty increase…
Neil Bishop, chairman at Bishop’s Move, stated:
“Whilst we recognise that in the current economic climate we were unlikely to see a cut in fuel duty, we continue to support an ongoing freeze. This is a welcome relief for industries such as ours which rely on the roads to operate. It is beneficial to the economy, as well as popular with motorists, that the chancellor quickly makes his mark by extending the freeze on duty for a seventh year. Low fuel prices not only benefit businesses and families, but can also increase business investment, resulting in lower production costs and improving household spending across the UK.”
On the £400m injection into venture capital funds…
Alex Fenton, founder and CEO of GapCap, observed:
“The extra funds promised by the chancellor are exactly what we needed to ensure any fears held by UK small and medium sized enterprises are allayed. We’ve seen first-hand that, post the Brexit vote, many young UK businesses face uncertainty and are in need of support more than ever, so this encouragement from the government is perfectly timed.
“Keeping UK start-ups in the UK is crucial to the economy and in ensuring UK’s status as the European centre for all young, growing industries. Post-Brexit, there was only really one way to secure their loyalty. This was through an injection of funds and I am delighted to see that is what we’ve received.”
On the outlook for small and medium sized enterprises…
Amit Sankey, CEO of Wirefund, said:
“The government’s cut in corporation tax to 17% is of course a boost and the announcement of much-needed infrastructure projects is also welcome news. But more is needed in today’s environment, as it is more important than ever that the government increases confidence in British small and medium sized enterprises. 383,000 new businesses were born between 2014 and 2015, the highest amount since records began. Small business is on the up and it’s more vital than ever that we not only maintain this momentum, but fuel it.
“Hammond has already stated that the UK faces “unprecedented uncertainty” with Brexit and so the government needed to put proactive and bespoke plans in place to support small enterprises. Alongside a cut in corporation tax, it would have been great to see clarity regarding EU-funded projects. And while it’s great to see rural businesses supported, it would have been good to see an increase in London relatable thresholds to address rental concerns in order to support small and medium sized enterprises in our capital.“
Dafydd Llewellyn, managing director at UK SMB at Concur, continued:
“The chancellor finds himself delivering an Autumn Statement at a tricky time. After a year of uncertainty and decision stagnation, small and medium sized enterprises will rejoice in news that corporation tax will fall to 17%. The fact this will rise even further for small and medium sized enterprises based in rural areas is great news.
“To ensure that small and medium sized enterprises remain the powerhouse of the economy, someone must be finally appointed into the role of Small Business Commissioner. That such a role exists but has yet to be filled is continuously worrying. At a time when small enterprises are highly vulnerable to late payments by larger organisations and as a hard Brexit approaches, support and guidance are top of small business’ wishlists.”
On the investment of £1.1bn in the UK’s transport infrastructure…
Shai Bernstein, associate professor of finance at Stanford Graduate School of Business, commented:
“Though we are now living in a very digital world, direct physical links between businesses, consumers, and investors still have a big part to play in modern commerce. A good example of this is the recent research we did into the impact of direct links on investors and portfolio businesses.
“Our research showed that better infrastructure links between venture capital investors and portfolio companies led to an increase in face-to-face interactions, which, in turn, had a direct causal effect on the success of and quality of innovation by those affected portfolio businesses. The data showed the number of patents filed by those businesses directly affected by enhanced infrastructure rose by three per cent, and the citations per patent rose by almost six per cent, indicating an increased quantity and quality of innovation. Furthermore, the probability that those portfolio businesses would IPO or achieve a successful exit also increased.
“We empirically proved the importance of infrastructure to businesses and, as the government is investing heavily in local projects designed to promote business growth in parts of the UK outside London, the findings of our research point to the value of investing not only in local programmes but in national infrastructure too.”