Autumn Statement responsible, solid, and focused on local growth
Commenting on today’s Autumn Statement by Chancellor Philip Hammond, Babs Murphy Chief Executive of the North & Western Lancashire Chamber said:
“Philip Hammond has delivered a responsible, solid and focused package that will reassure both business and markets.
“Increased resources for local and regional transport infrastructure, broadband, housing and innovation will boost business confidence at a critical moment. The Chancellor’s strong focus on the growth requirements of our cities, regions and nations will not go unnoticed in business communities across the UK.
“While business communities would have liked Philip Hammond to go even further to support growth, they will recognise that his hands are somewhat tied by lower tax receipts and sharply higher borrowing forecasts. The fact that he chose to commit significant new resources to support growth and productivity demonstrates welcome flexibility during a period of uncertainty and change.
There was very little support in our business communities for further cuts to Corporation Tax, so Philip Hammond was right to stick with existing plans. However, we would have liked to see more action on the high up-front taxes and costs of doing business in the UK, particularly business rates.
On Business Rates:
“For rural businesses and those benefitting from the lower cap on annual increases following this year’s revaluation, the measures announced are welcome. However, British businesses will continue to pay the highest local property taxes in the developed world. Addressing this upfront burden is essential if they are to invest more in training, recruitment and growth plans – all essential to closing the ‘productivity gap’. Bringing forward the planned switch to CPI for up-rating from 2020 to 2017 would have helped and an opportunity to do this was missed.”
On fuel duty:
“The continued freeze is positive news for businesses, particularly amongst smaller firms and the self-employed, for whom transport and distribution costs account for a significant proportion of their cost base.”
On Insurance Premium Tax:
“Businesses across the UK will be disappointed by a further rise in the Insurance Premium Tax. This is yet another stealth tax on businesses, and increases the upfront cost of a critical safety net for firms.”
On road and rail infrastructure investment:
“We are pleased that business calls for action on infrastructure have made an impact. It is now critical for these upgrades to begin without delay, as they are crucial not just to business confidence, but also to local and national growth prospects.
“Transport improvements have positive knock-on effects, as they open up supply chains, generate thousands of new contracts for UK businesses, as well as enhance access to labour and new markets.
“While we want to see ‘quick start’ projects delivered, we also need a long-term outlook. For that reason, business wants the government and the National Infrastructure Commission to plan for the delivery of major projects that can help prepare the economy for the future.”
On export support:
“We welcome the announcement of additional finance and insurance support by UK Export Finance, which should provide valuable help to UK exporters. However, this is not sufficient to improve our ambition to get more businesses to export – and increased direct support such as enabling businesses to attend trade missions, trade fairs, commission market research or make themselves export ready would have been an important additional boost to companies.”
On broadband digital infrastructure and 5G:
“We’ve been calling for years for the necessary funding to improve business broadband connections and develop 5G, so these announcements are a big step in the right direction.
“Fibre to the premises (FTTP) is the future – businesses need faster and more reliable broadband across the UK. We hope the 100% business rates relief for new full-fibre infrastructure will encourage better business connections, because the current reliance on old copper lines hold too many businesses back.
“The UK is still some way behind delivering access to a world-class digital infrastructure to businesses in all parts of the country. The government’s focus must now be on addressing the lack of superfast broadband to new and existing business parks. Rectifying this would go some way to boosting business confidence.”
On research and development:
“Increasing investment in research and development will provide a boost to the UK economy at a time when productivity growth remains weak. However, to ensure that UK firms remain competitive on the global stage it is vital that greater investment in research and development is supported by retention of our intellectual property.”
“The chancellor has already committed investment to tackle the housing shortage in this country. Helping to meet the demand for housing is one of the ‘quick-start’ infrastructure projects we’ve been calling for. But local business confidence will only be boosted as a result when firms start to see diggers in the ground.”
On the National Living Wage:
“Most businesses already pay above the National Living Wage but for the others the latest increase comes at a time when businesses are already facing a myriad of other upfront costs and uncertainty about investment and recruitment. It’s therefore right that the government has re-adjusted the trajectory of the planned National Living Wage increase in line with changes in economic circumstances.
“Our research shows that sharp increases in the National Living Wage will cause many firms to implement cost reduction measures, such as reducing recruitment and staff hours or increasing prices. It’s important the government retains a similarly flexible approach going forward which will protect businesses and jobs.”
On local growth:
“The explicit support for devolved funding and powers confirmed by the Chancellor is beneficial to businesses when local decision-making means greater efficiency, accountability and results. But to achieve these optimal results, the voices of businesses must be heard in devolution discussions.”