In today’s Autumn Statement, Chancellor George Osborne reiterated the Conservative government’s intention to build a higher wage, lower tax, lower welfare country.
Growth figures for the economy were reported at 2.4% in 2016, 2.5% in 2017, 2.4% in 2018 and 2.3% for 2019/20 – Osborne said this represented balanced, whole economy growth for a country living within its means. He also announced that the UK’s finances have improved since the Budget was announced, and that this has allowed the government to borrow less to cut the deficit – Osborne compared this to “fixing the roof while the sun is shining.”
Osborne also repeated a favourite soundbite: “we are the builders”. This was in reference to an increased spending on infrastructure, with London due to receive an £11 billion investment in transport and infrastructure.
The highlights for SMEs
• The apprenticeships levy is to rise to £3 billion a year as part of the Conservative government’s plans to increase the number of apprentices to three million by 2020. The levy will be set at 0.5% of the payroll bill, but due to an allowance set at £15,000, 98% of employers will not pay
New apprenticeships levy to raise £3bn https://t.co/DGiVeS3kQB— BBC Business (@BBCBusiness) November 25, 2015
• There will be 26 new or extended enterprise zones, and Osborne repeated the announcement made at the Tory conference that the government is devolving business rates to local councils. Councils will have the power to cut rates to encourage businesses to set up shop in their towns, and they will also have the power to raise the rates to fund specific infrastructure projects if they have the support of their local business community
• The Department for Business is being cut by 17%
Department for Business budget is being cut by 17% but science budget protected. Budget for further education probably the big loser.— Joel Hills (@ITVJoel) November 25, 2015
17% cut to Department for Business, Innovation & Skills budget. Not clear where it'll come from, but it's a smaller cut than some had feared— TES (@tes) November 25, 2015
• The Small Business Rate Relief Scheme is being extended for another year
• Pensions – the basic state pension is set to increase by £3.35 a week in 2016, the new rate for a basic state pension will be £155.65
Next year the basic State Pension will rise by £3.35 to £119.30 a week pic.twitter.com/wsXVHSNNtZ— HM Treasury (@hmtreasury) November 25, 2015
What are SMEs saying?
Jim Duffy, CEO, Entrepreneurial Spark said, "The small business rate relief scheme being extended for another year is good news for start-ups, but I'd like to see the Chancellor go deeper and provide more tax breaks and support for entrepreneurs. We'd like to see more initiatives to help start-ups recruit, plus easier access to funding for high potential businesses."
James Blake, CEO of Hello Soda said: “Infrastructure and connectivity are key to the long-term sustainability of the Northern Powerhouse but we also need to foster business growth, support more entrepreneurs and promote innovation. For the north to truly become a powerhouse, we need to embrace new industries and stop trying to reinvent the old. The powerhouse of the industrial revolution needs to rise again and became a home to the digital revolution.”