The Chancellor’s Autumn Statement was mixed news for London, according to business and commerce bodies.
The verdict on the whole was positive but the theme that George Osborne had not gone as far he should have to help businesses emerged loud and clear.
Here’s their verdict:
Institute of Chartered Accountants: “a danger the recovery will flag”
Michael Izza, ICAEW chief executive, said: “Business growth is critical to long term economic prosperity and the OBR’s raised forecast for next year is getting closer to ICAEW’s own forecast of 2.9%. There is still a danger though that the recovery will flag unless business investment and exports grow to offset rising consumer and national debt and the on-going squeeze on household incomes.”
British Chambers of Commerce: Osborne “should have been bolder”
The British Chambers of Commerce (BCC) welcomed the Chancellor’s intention to cut business rates, but said he “should have been bolder”, adding “the UK is still some way from achieving the truly great economy we need.”
John Longworth, director general, BCC said:
“The Chancellor has in large part heeded business’s call for a steady Autumn Statement, rather than a grab bag of electoral giveaways. While Britain’s economy is improving, and our businesses report strong confidence, the UK is still some way from achieving the truly great economy we need.
“Business will be pleased that the Chancellor has finally acted on business rates bills after years of relentless increases that sucked the life out of businesses in all parts of the UK. The measures announced to curb business rate increases are positive, but not strong enough to boost companies’ cash flow and investment. The Chancellor should have been bolder, freezing business rates entirely until this pernicious tax can be properly reformed.
“Upgraded growth forecasts, lower borrowing forecasts, and increased business confidence are all indications that the UK economy is moving in the right direction. However, restoring stability to the public finances remains crucial to businesses. The Chancellor must continue to restrain current spending, and prioritise resources on investment in infrastructure and on creating the most competitive environment for wealth creation and enterprise.”
British Property Federation: “tinkering around the edges” not enough
Liz Peace, chief executive, British Property Federation, said:
“We are delighted that the Chancellor appears to have heeded our calls – and those other business groups – of to commit to a review of business rates, as well as taking short-term action to mitigate the harm that continues to be caused by this archaic property tax. However, simply tinkering around the edges of the system will not be enough – the business rates regime remains one of the greatest barriers to investment in the built environment, and is fundamentally unfit for the 21st century.
“Action to support the re-use of empty shops is particularly welcome. Empty properties blight our high streets and town centres, and we would urge government to think further about reforms to the business rates regime that would allow property owners to invest further in these properties.”
City of London Corporation: “We cannot afford to stand still”
The City of London Corporation reacted positively to the Autumn Statement, in particular applauding the tax relief for investment in social enterprises, after research showed a well-constructed tax incentive could generate up to £480m of new investment for the sector over the next five years, said Mark Boleat, policy chairman.
“This will play a crucial role in underpinning the continued success of the social sector,” he said.
“The direction of travel on corporation tax is welcome and sends a positive signal that the UK is open for business and inward investment.
“If London is to remain a leading hub for international business, we must tackle the twin problems of skills shortages and youth unemployment. Together with additional funding for higher apprenticeships, the decision to remove National Insurance contributions that affect a million and a half jobs for young people is welcome.
“The Government’s infrastructure upgrade programme is critical to the continuing success of London and the UK. We cannot afford to stand still while our rivals build for the future if we are to remain globally competitive. We support the agreement from China to invest in our infrastructure during David Cameron’s visit to the country. Similarly, we welcome the announcement as part of the National Infrastructure Plan that the insurance industry will make long-term capital investment of £25bn in projects.
“Confirmation that a guarantee for the £1bn Northern Line extension to Battersea has been agreed is a positive signal. A pipeline of deliverable major projects is needed to encourage international investment, and to retain the skills and experience that have so successfully come together during the Crossrail project. Crossrail 2, in particular, is a scheme that could deliver considerable long-term benefits while greater airport capacity in the South East is urgently required to ensure that the UK does not fall behind in the global race.”
Federation of Small Businesses: reduction in bills “warmly welcome”
Sue Terpilowski, London policy chairman, Federation of Small Businesses, said:
“Small businesses in the Capital have long argued that business rates affect capital investment and employment growth so we welcome the announcements to extend small business rate relief until 2015 and to reduce the lengthy rate appeals process. The £1,000 reduction on the bills of high street businesses are warmly welcome, and this will appease high street retailers, however, we were disappointed that the inflationary increase of 3.2% was not scrapped entirely.
“Employment costs in the capital are dearer than other parts of the UK so we welcome the removal of National Insurance Contributions for employing young people. The FSB also welcomes the cancelling of fuel duty scheduled for next year.”
Confederation of British Industry: measures will help tackle “scourge of unemployment”
John Cridland, CBI director-general, 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.”