Autumn Statement 2014: Entrepreneurs react
With Osborne’s new measures said to put Britain on “course for a truly national recovery”, small business owners weigh in on the government's plans for UK enterprise…
This afternoon the chancellor of the exchequer George Osborne revealed the government’s latest plans for the UK economy in the Autumn Statement 2014.
With new measures such as the expansion of the British Business Bank and Funding for Lending scheme, a review of business rates for high street retailers, and an increase of research and development tax credits, Obsorne was keen to assert that the focus is firmly steered towards “backing business, supporting science, and developing innovation”.
A statement that appeared to largely benefit the UK’s small and medium firms, we gathered some responses from entrepreneurs and small business owners to gauge their views on the government’s latest policies…
On national insurance contributions for apprentices under 25
Peter Burgess, managing director Retail Human Resources:
“The key desired outcome from the Autumn Statement is that the current economic confidence continues to be built upon so businesses can carry on building their workforce and investing in growth and this announcement is a step in the right direction. We’ve heard from the chancellor about how small and medium enterprises are the lifeblood of the UK economy. By abolishing employer National Insurance contributions for apprentices aged under 25 on earnings up to the upper earnings limit this will help increase competitiveness and have a direct impact on job creation. In order to fund these measures, the government should have looked at further restrictions on benefits. In particular, the triple lock on pension increases is completely unsustainable and should be curbed now before it becomes politically impossible to change.”
On corporate tax increases
Toby Ryland, partner at HW Fisher & Company:
“The emphasis the chancellor placed on the so-called ‘Google tax’ sounded great in practice but is unlikely to give the average multinational much cause for concern. The chancellor said this will raise £1bn over five years, but ultimately this is a tiny proportion of the profits the multinationals he has in mind are generating.
“In reality, many of the UK’s double tax treaties with other countries dictate where profits can be taxed. Sweeping measures like this often come to nothing. The chancellor has made the right noises, but most multinationals will be able to side-step these new rules without breaking into a sweat.
“Unsurprisingly, the chancellor has found the drop in corporation tax receipts from banks to be unacceptable. The banks incurred substantial tax losses during the credit crunch, which they are carrying forward to reduce their future profits, potentially for the next 15 years. To prevent this, banks will only be able to reduce their profits by 50% per year so they will immediately be taxpaying despite having brought forward trading losses. The banks generally have their cake and eat it, but for once that doesn’t seem to have happened.”
On fuel duty caps
Alistair Bingle, managing director Bishop’s Move:
“The fuel duty price freeze signals an extraordinarily good week for businesses that rely on the roads to operate. This is a very reasonable move and will bring some relief at the pumps for both businesses and families alike. In addition, the fuel duty price freeze will stimulate consumer spending and business investment and re-ignite economic growth across the UK. By announcing that there is a firm commitment to freezing fuel duty then this gives industries, such as haulage, the breathing space in which to plan and grow over the next 18 months and thus, create more job opportunities.”
On a business rates review for high street retailers
Vince McLoughlin, partner at Russell New:
“It would have been a ridiculous decision to stifle growth by hindering businesses with additional costs. The small business rate system has previously placed too high a burden on UK businesses and needed reform. However, with the official reform not being introduced until 2016, it makes political sense to extend the relief until then. With this greater breathing space, small and medium enterprises will have an incentive to make crucial investment decisions, some of which may have been delayed waiting for this announcement. Perhaps then will they be able to get mid-sized businesses to unleash their capital which will stimulate further growth and give the economy another push in the right direction.”
Ashley Highfield, CEO of Johnston Press:
“The announcement of a full structural review of the business rates system, is something we have actively campaigned for. And if this does indeed lead to a fairer system, it would be a significant step towards reviving our local high streets. It is these local businesses that drive local economies and, in turn, thriving communities. We look forward to seeing the review translate into real change that will allow all enterprises to compete on a level playing field.”
On research and development tax credits
Phil Orford MBE, chief executive of the Forum of Private Businesses (FPB):
“While we applaud the increase in R&D tax credits – a successful driver for innovation, we would have preferred the relief to have been focused on the formulation of a new Export Tax Credit to incentivise and support new exporters in riskier overseas markets.”
On support for first-time exporters
Julian David, techUK CEO:
“We welcome the government’s new £45m programme to encourage new companies exporting for the first time – which we called for in our techUK manifesto.
“The missed opportunity of today was the failure to provide greater backing of the UK as a world leader in the Internet of Things (IOT). This will be the next internet revolution. Countries like China and India are now outpacing the UK in the race to seize this £4.6trn opportunity. We call on the government to look at this issue again.”
On the Enterprise Capital Fund and Funding for Lending
Jim Duffy, CEO of Entrepreneurial Spark:
“The additional £400m Enterprise Capital Funds and extension of Funding for Lending can only be good for business. We support start-ups across the UK to grow world class businesses and one of the biggest issues they all face is access to finance. While the private sector has a role to play in supporting entrepreneurship and investing funds in new businesses, government support is needed and these two announcements are a step in the right direction.
“According to the FSB, small businesses accounted for 99.9% of all private sector businesses in the UK and 59.3% of private sector employment at the start of this year, so focussing on start-up businesses and supporting entrepreneurs to grow will have great impact on our economy.”