To provide a bit of context ahead of the Autumn Statement address on 3 December, we’ve looked at five business-focussed elements from last year’s speech and analysed what has been done since then.
Improvement to UK Export Finance activity:
Created as way to fill the gap left by British banks when it came to helping businesses transact overseas, UK Export Finance serves as a trade credit guarantee agency.
The Treasury has so far provided UK Export Finance with £3bn (October figure) worth of capital to allocate where it sees fit, with partners such as Bank of China and Deutsche Bank secured to help with the process.
At the end of 2013, Osborne announced that UK Export Finance’s maximum commitment would become £50bn, a doubling on the previous sum.
In yearly figures released in July by the agency, it was revealed that £2.3 billion had been lent during the previous financial year. While the value of business supported in the year before was higher at £4.3bn, this was largely made up by a single £2bn defence case.
The number of countries involved climbed from 58 to 71 and the amount of exporters from 130 to 84. UK Export Finance has also announced new plans to grow its competitiveness, by adding an “enhanced ability to lend directly to overseas buyers of UK goods and services”.
While the increase in support was key in Britain achieving its ambition of doubling exports by 2020, it remains to be seen whether UK Export Finance will drive through to that figure.
Judgement: Jury is still out
Further £40m for higher apprenticeships:
With big support for apprenticeships, a lot of which from resident Real Business columnist Charlie Mullins, new funding was made available in the last Autumn Statement to produce an additional 20,000 higher apprenticeships over the next two years.
During National Apprenticeship Week in March, some of those 20,000 were pledged by employers including Lloyds Banking Gropu, EE and Starbucks. Away from big business, it was also announced that 47 per cent of the total apprenticeship vaccines were being created by SMEs.
In October, 700 employers unveiled 76 new apprenticeships in professions ranging from TV production to welding. That month also had good news when it came to salaries. Cable outlined proposals to “simplify and boost” the National Minimum Wage for apprentices. This is set to give some 31,000 apprentices in their first year a pay rise of more than £1 an hour, from £2.73 to £3.79.
Apprenticeships continue to grow in popularity, with 43 per cent of employers more likely to offer one than two years ago. This is because two in five believe the talent pool has widened and 41 per cent acknowledge that apprentices stay in the business longer than other recruits.
Apprenticeships, led by a report compiled by former Dragons’ Den investor Doug Richard in 2013, are being led by businesses – who are being encouraged to choose the training that is most relevant to them and the apprentices being brought on.
The boost given in the last Autumn Statement appears to be working, providing important financial aid and incentives to bring apprentices into the fold.
Judgement: Osborne wins
Read more on the Autumn Statement 2014:
- Could high business growth start to attract tax relief
- Deficit progress leaves little room for pre-election giveaways
Cut in business rate rise and extension of rate relief:
Instead of increasing with the September 2013 retail prices index measure of inflation, Osborne decided to cap the rise at 2 per cent when it came into action in 2014. On top of this, the coalition lengthened the Small Business Rate Relief (SBRR) for an additional year (reaching into 2015), meaning that 360,000 firms in the UK get 100 per cent relief.
Business rates are always a bone of contention when it comes to Budget and Autumn Statement addresses. Many business owners see it as an quick way of making their lives easier.
Since the announcements in December last year, the issue has not gone away. The most recent development has shown that Osborne is likely to fail in his effort to clear the backlog of business rate appeals, after a commitment to get rid of 95 per cent of the 170,000 outstanding ones by July 2015.
Business organisations such as the CBI and FSB continue to lobby for business rate cuts, with the situation being described as “outdated” and in need of “total reform” by FSB national policy chairman Mike Cherry.
The expiration of small business rate relief in March 2015 is a worry for many who would have to begin paying fees. The solution seems to be a further extension of relief.
However, with business rates set to grow at a faster rate than council tax and fuel duty, according to OBR, there will surely be calls for a complete overhaul of the situation rather than little changes here and there.
Judgement: Osborne misses
More cash for Start Up Loan scheme:
Osborne gave a further £160m to Start Up Loans, to be allocated over six years, meaning the scheme had double the amount of capital to work with. Back then, it had recently granted its 10,000th loan.
The scheme has now lent £120 million to entrepreneurs looking for support in starting up a business and said to be on track to meet the target of aiding 30,000 new businesses by 2015.
A Statford-upon-Avon entrepreneur became the 20,000th recipient in July, taking total lending beyond the £100 million mark. Some 41 businesses were being backed a day when the figures were released, with an average loan amount of £5333.
Shortly before last year’s Autumn Statement the scheme recieved a boost when it was announced that Richard Branson’s new Virgin StartUp initiative would provide loans alongside the Start Up Loans company.
Access to finance, particularly for those deemed riskier propositions, has dogged the entrepreneurial community since the economic crisis. Allocating a pot of money to be distributed an a low interest basis by an independent organisation fronted by the likes of James Caan and Branson appears to be working.
Judgement: Osborne wins
Introduction of reoccupation relief:
The concept of the high street is one which was fascinated this and previous governments. Often viewing it as key to local prosperity, initiatives such as Mary Portas’ quest to save the high street, have been introduced to varying success.
As one of the surprise additions to last year’s Autumn Statement, Osborne unveiled a reoccupation relief – halving the rates that new tenants are required to pay. The relief was then granted to businesses moving into long-term empty retail properties between 1 April 2014 and 31 March 2016.
With the initiative only coming into effect seven months ago, no figures have been released yet to show whether it has had an impact.
The relief now sits alongside others such as a £1,000 discount for trail premises with a rateable value of up to £50,000, capping of the Retail Price Index increase in bills to 2 per cent, payment of bills over 12 months and the aforementioned rate relief until April 2015.
A quick walk down most high streets and it does not appear to have worked particularly well. Empty lots and charity shops now take up an increasing foot print, but we’ll withhold condemning the scheme until some solid numbers have come out.
Judgement: Jury is still out
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