Chancellor George Osborne got a fair share of hurrahs and boohoos at the House of Commons this morning.
While he insisted that the “economic plan is working”, Shadow Chancellor Ed Balls pooh-poohed his plans and accused him of being “in complete denial”.
Osborne’s big business measures were a cap on inflation increases in business rates for all premises at 2% from next April, a new reoccupation relief for vacant town centre shops and aiming to get an extra 20,000 higher apprenticeships over the next two years.
But here’s why the Autumn Statement ddin’t impress:
1. Will King, founder, King of Shaves: “I give Osborne a B-“
Will King, founder, King of Shaves, said:
“The news in the Autumn Statement looks “OK, so-so” for businesses at first glance. Capping business rates at 2%, Tick. Fifty per cent relief for someone taking on an empty shop, Tick. Pay rates in installments (Tick – cashflow is King remember).
“News on directly increasing the funding of apprenticeships gets a tick too, with tax raised funding employers directly who are taking on employees with real skills. No, Lord Sugar, this doesn’t mean you.
“Good news on NI being reduced for young people too, helping them get into work. The promise to continue to lower the tax burden on business, if delivered is good news too.
“I’d have liked to have seen more emphasis on helping small businesses re-purpose local communities (high street regeneration) than was offered, and more tax relief for those starting up, or working in businesses with a turnover up to £1m. And something clever and strategic on developing the P2P #altfunding business platforms. But, overall, a ‘steady as she recovers, let’s not get ahead of ourselves yet’ plan. I give George a B-“
2. We need a complete break from business rates
Dan Wagner, CEO and chairman, Powa Technologies, said:
“The Chancellor’s decision to cap business rates at 2% will go some way to allaying the concerns of the typical high street retailer. However, it is questionable whether it is powerful or effective enough to support many of the SME’s who currently struggling. For some, it may already be too late.
“To really address the pains of the high street, retailers would need to benefit from a complete break from business rates. Capping them for 12 months is a relief, however, it doesn’t go far enough to support businesses currently battling to survive what is an incredibly tough environment.”
3. Autumn statement fails to send signal for business to invest
Terry Scuoler, chief executive of EEF- the manufacturers’ organisation, said:
“The Chancellor was right to stress the risks to recovery but did too little to support the investment that would secure it.
“While the Autumn Statement contained some useful measures on apprenticeships, skills and business rates, it failed to send a clear signal to industry that now is the right time to invest and create new jobs. In particular, it failed to address the growing threat to investment from energy prices that are squeezing margins and racing ahead of our competitors.”
4. Chancellor’s business rates cap too little too late
Richard Wackett, national head of rating , Lambert Smith Hampton (LSH), said:
“The government has missed the opportunity to reform the outdated business rates system, which would reduce the government’s administration burden, allow them to settle appeals more efficiently and remove artificial barriers to further development and growth. The proposed measures will complicate an already complex regime and avoids addressing the more fundamental reform required by business occupiers.”
5. Osborne gambles on foreign investment with capital gains tax hike on homes
Liz Peace, chief executive of the British Property Federation:
“If the government seriously wishes to make housing more affordable then it must encourage investors to deliver more homes, not fewer. The positive benefit that overseas investment brings to the UK is therefore vital, and government should do all it can to nurture it. This measure will raise little more than £40m a year, and yet may do far greater damage to institutional investment in the private rented sector, and to housing supply more generally.
“Nevertheless, we are pleased that Government has heeded our warnings and has committed to consult on these proposals. Hopefully we will avoid last year’s debacle, when the 15% SDLT rate aimed at purchasers of high end property was mistakenly applied to genuine property investment businesses, with no prior warning.”