March 10 2014 Latest news:
Thursday, December 5, 2013
Moves in Chancellor George Osborne’s Autumn Statement to ease the burden of rates, National Insurance payments and fuel duty were welcomed by business group’s today.
Upgraded forecasts for economic growth also caused some cheer, but concerns remained that the Government’s commitment to major infrastructure investment is lacking urgency
As widely predicted, George Osborne announced that increases in business rates bills from April 2014 will be capped at 2%, although some groups had hoped for a freeze.
However, the Chancellor also revealed plans for a discount of £1,000 on business rates for retail premises with a rateable value of less than £50,000, and a 50% discount on rates bills for businesses occupying empty premises, in a further bit to revitalise struggling high streets.
Other measures announced by the Chancellor today included a further freeze in fuel prices, cancelling next year’s scheduled 2p per litre increase in petrol prices, a National Insurance concession for firms employing people aged under 21 and a doubling of export finance capacity to £50billion to help firms break into emerging markets.
The Chancellor was also able to report a series for forecast upgrades from the Office for Budget Responsibility (OBR) which now expects the economy to grow by 1.4% over 2013 against its previous prediction of 0.6% to 1.4%.
Its forecast for 2014 has also been upgraded from, 1.8% to 2.4%. with growth over the four years from 2015 has been forecast at 2.2%, 2.6%, 2.7% and 2.7%.
Employment will rise by 400,000 in 2013, says the OBR, with unemployment forecast to fall from 7.6% this year to 7% in 2015 and 5.6% by 2018.
Public sector net borrowing is forecast to be 5.6% in 2014, then 4.4%, 2.7% and 1.2% in subsequent years, with a small surplus by 2018/19.
The Government will borrow £111billion this year, £9bn less than predicted in March. Borrowing to fall to £96bn next year, then £79bn, £51bn and £23bn in following years.
Andy Wood, chairman of the New Anglia Local Enteprise Partnership, said: “The Government’s announcements will provide real, tangible support for small businesses. Small businesses are the lifeblood of our economy. Across Suffolk and Norfolk there are more than 60,000 small and medium sized enterprises, so we very much welcome measures announced today which will help companies to cut overheads.
“The Small Business Rates Relief and £1,000 business rate discount for small shops, pubs and restaurants will have an important impact on business.
“The principle of businesses being funded directly for apprenticeships is a good one. However, we want to ensure costs are manageable, so that even the smallest firms can take on an apprentice. New Anglia’s vision is to ensure that young people have the skills that businesses need to thrive now and in the future. Expanding higher apprenticeships will help to demonstrate to young people that apprenticeships can be a powerful pathway to business leadership.”
John Dugmore, chief executive of Suffolk Chamber of Commerce, said: “While for most businesses the week of the Autumn Statement has been dominated by the success of the No Toll Tax on Suffolk campaign there are some further welcome measures from the Chancellor.
“The cancellation of the fuel duty rise in 2014 and the further investment finance for firms looking to export into new markets is good news.”
However, he added: “What business large and small needs more than anything though is stability. Therefore Government does need to do more to address business rates where it could have gone further and to ensure energy prices are addressed more directly.
“Large infrastructure programmes, like the A14 upgrading, at the very least need to be kept to tight schedules. Spades need to be in the ground now for business to really benefit.”
Chris Soule, Suffolk chairman for the Federation of Small Businesses, welcomed the measures to help small shops, although he added that the regeneration of high streets would also require some “joined up thinking” such as allowing larger redundant stores to be sub-divided.
Mr Soule said moves to give employers a direct role in paying from apprenticeship training should improve standards, although he beleived that the broader skills agenda needed to consider the need of employers such as hotels, pubs and restaurants for inter-personal skills as well as the key subjects of literacy and numeracy.
He added that the further freeze in fuel duty was particularly good news for regions such as East Anglia which are highly reliant on cars, although he warned that the policy could not last forever and that there was still a need to cut usage of petrol and diesel.
Richard Tunnicliffe, eastern region director at the CBI, said: “We have always advocated the dual approach of tackling the deficit and driving growth − the OBR forecasts confirm it is working. Let’s stick with what works.
“The pressure on the high street has been recognised; the 2% cap on business rates and discount for very small businesses are positive, as is the reoccupation relief.
“Abolishing a jobs tax on employing young people under 21 will make a real difference and help tackle the scourge of youth unemployment.
“But it was a missed opportunity not to support our hard-pressed energy intensive businesses which are also struggling with rising costs, and the package on housing supply could have been more ambitious.
“As we enter the festive season, positive news on growth is clearly welcome but much remains to be done if the benefits of economic recovery are to reach every home in every corner of the UK.”
Rooney Anand, chief executive of Bury St Edmunds-based pubs and brewing group Greene King, said: “I watched today’s statement closely and am pleased to see that employer National Insurance contributions will be removed for under 21s, which is something that Greene King welcomes, as a major employer with over 22,000 employees across the UK, of which over 5,000 are under 21.”
“As a growing British business, the Chancellor’s announcement today gives us further support and confidence to continue to invest in young talent. This is an important step and will encourage us to hire more young people, to train them into a career in hospitality and to help our business to grow, which in turn further helps the economy. Coupled with the announcement on business rates, the Chancellor is listening to the suggestions coming from the business community.”
James Lowman, chief executive of the Association of Convenience Stores, which represents 33,500 local shops, said: “The proposed cut in business rates is fantastic news, helping the vast majority of convenience store operators. This will help businesses to make investments in the next two years.
“We also support the cap on rates at 2% which we have advocated for a number of years. This will help businesses to plan for their costs over the long term, but only if it becomes a long-term commitment.
“The reoccupation rate relief is also a strong short term incentive to bring empty properties back into use.”
Mr Lowman added: “We welcome the fact the Chancellor has listened to our concerns and will work to secure a fundamental review of rates, that is still necessary for the long term.
“The Chancellor’s decision to remove employer NICs for all employees under 21 is a welcome move for local shops. 26% of staff in convenience stores are young workers, and this measure will give retailers more incentive to offer young people their first experiences of work.”
Brian Berry, chief exeucitve of the Federation of Master Builders, said the Chancellor had missed “a golden opportunity” to reverse decades of underinvestment in Britain’s ageing housing infrastructure by not implementing a reduced rate of VAT on domestic renovation and repair.
“In his Autumn Statement George Osborne says he is backing British business and British families, and correctly named housing as the general public’s top infrastructure priority. However, the Government continues to focus on big-ticket projects such as road and rail, which will be years in the planning and are unlikely even to begin within the term of this Parliament.
“The Chancellor has missed an opportunity to reduce VAT on housing renovation and repair. This would deliver an instant economic fillip to millions of households that are struggling with the ever-increasing cost of living and give Britain’s builders the boost they need to capitalise on the recovery.”