Autumn Statement 2014: Did Brits get the 'gifts' they wished for?
11 min read
03 December 2014
Chancellor George Osborne's red briefcase has finally be opened, but was the nation pleased with what was found inside?
Real Business asked Brits whether their wishes had been granted this year. While some entrepreneurs and business owners cheered on the latest announcements, others, although they agreed it was a step in the right direction, wished more had been done for their sectors.
Simon Hill, CEO of Wazoku, said:
“Today was one of the most startup friendly Autumn Statements of this parliament – £400m more for Enterprise Capital Funds that invest in fast-growing startups, £500m of bank lending via the British Business Bank and the Funding for Lending scheme (FLS) has been extended for another year. But with access to funding for startups such an on-going challenge, I’d like to have seen a little more clarity brought to the support that is already there. There are many schemes in existence but the complexity and red tape around them mean they can be off-putting for startups and prevent them actually benefitting from such initiatives.
“The R&D tax credit increase (to 230 per cent) was one of the more interesting measures announced today. This will encourage innovation and disruptive thinking, which are pre-requisites for startups. That said, I’d like to have seen it go even further, with broader innovation tax relief that would have encouraged even more risk-taking in business and improved UK startups’ ability to compete globally.”
Stuart Law, founder and CEO of Assetz Capital, said:
“This is another sign that the government is firmly behind peer-to-peer lending: George Osborne has rightly recognised that investors lending through P2P platforms are the victims of a tax trap, and taken a positive step to help them. These rules won’t apply to lenders until April 2015, however, a simple way for lenders to reduce taxation already exists: avoid losses.
“In the short term at least, lenders are better off looking for platforms that minimise losses to start with – rather than using tax rules to recoup them. Keeping these rates low helps to reduce the tax burden faced by investors and increase their net returns.”
David Brimelow, managing director of Duo UK, said:
“It’s heartening to hear that manufacturing is the fastest growing sector of the UK economy and that’s testimony to the wealth of talent within the sector and the determination over the years of business leaders to get on with the job, whether or not ‘rebalancing the economy’ is the current political vogue. We’re a niche manufacturer and invest a lot in training and development but our growth is still restrained by a lack of skilled individuals, particularly for our engineering positions.
“We are whole hearted supporters of the Apprenticeship Scheme but, while the abolition of National Insurance contributions for under 25s will help, it won’t fix the fundamental problem of an education system which isn’t vocationally focused. If the government really wishes to support manufacturing, it should consult with businesses and develop a robust vocational training programme designed for school leavers who want careers, not jobs.”
Neil Addley, managing director of Trusted Dealers, said:
“There wasn’t much for motorists in the Chancellor’s Autumn Statement, although I am pleased to hear that fuel duty will remain frozen despite falling prices. The most important thing to motorists across the country is the state of our infrastructure, which is why I welcome the Government’s pledge to invest £15bn into the country’s roads, which was announced on Monday. This will reduce the ongoing congestion and by increasing the capacity and condition of the roads, boosting the economy and increasing transport links between cities.
Ministers say this is the biggest investment in Britain’s roads in a generation, so I look forward to seeing the investment being fulfilled, not just promised. Research carried out by Trusted Dealers reveals British motorists spend around £3,453 every year on running their vehicles – equating to £100bn when applied to the 29.2mn cars on UK roads, so it’s about time drivers got something back from the government.”
Andrew Hunter, co-founder of Adzuna, said:
“Today’s well-intentioned statement aims to fill some of the remaining cracks in the jobs market, by giving our youth a boost, and making the most of their potential.
“Financial support for masters and postgraduate students is a move in the right direction in solving the skills shortage – which is still holding back the recovery in sectors like IT and Manufacturing. The hope is it will attract more young talent into higher education, widening our skilled workforce. Tax breaks for businesses employing young apprentices will also serve to nurture talent. Combined, both measures should go some way to alleviating youth unemployment, setting us further ahead of our European competitors on that score.”
Thomas Villeneuve, CEO and founder of Weroom, said:
“Although the government has discussed the reform to stamp duty – more specifically the increased taxes on two per cent of the most expensive homes – there are still a worrying lack of supportive measures for the growing number of flatsharers in the UK. This reform will only serve a small percentage of the UK housing market, and doesn’t take into account the increasing number of potential first time buyers who are still unable to get onto the property ladder.
“The government could do more to help fuel growth in a sector that is quickly the most prominent housing option for young Britons, particularly as house prices increase. In our recent research, 50 per cent of renters claimed they would like to see an introduction of a dedicated renting minister. This alone indicates how much demand there now is for flatsharing in the UK, especially in cities like London. It seems again that the government has missed a trick and not addressed the issues that are affecting modern British lifestyles so it’s very disappointing that this has not been raised.”
John Rowley, director of SMT Developments, said:
“As a technology-led manufacturing business we welcome the increase in R&D Tax Credits to 230 per cent, which will undoubtedly help cash flow and release money that can be directed into developing new processes and products. We have already benefited from this in the past and will certainly tap into the enhanced opportunity going forward.
“I was really pleased to hear about the £45m support package for export. While we need to hear the full details, any additional specialist support that increases our ability to trade overseas is something most manufacturers will like the sound of. But while looking after first time exporters is important, there should be a similar focus on companies already trading internationally.”
Jamie Standing, managing director of Gas Solutions, said:
“Traditionally, when times are tough, training is one of the first areas to take a cut; but that is actually a short-sighted move. I believe more employers from across various sectors and industries are starting to recognise that nurturing your own talent through apprenticeship schemes actually unearths much-needed skills and agility to meet the demands of their customers.
“With that said, the chancellor must tackle the glaringly obvious skills gap and the concerning unemployment levels amongst our youth. Apprenticeships are the solution to both problems. Placing kids straight into structured apprenticeship schemes with the prospect for a long-term career will send a shockwave through youth unemployment figures. Small businesses and start-ups should also be exempt from NI contributions for apprentices for a set period of time. The reason companies don’t take on apprentices at the moment is because it costs too much money. It costs £45,000 to take on an apprentice for three years. But businesses want to help youngsters. They want skilled workers coming through and they want to get youngsters off the streets.”
Matthew Finnie, CTO at Interoute, said:
“The government has simply got to get better at supporting British business innovation, particularly in those businesses suffering in the face of higher business rates. The Autumn Statement will do little to reassure businesses that the Government really understands what building a private business needs.
Compared with the US we are still way behind in practical measures that allow people starting companies to preserve cash when they need it; which is when they are developing their product, investing in people and promoting their idea. Business rate relief is a small start but needs to be widened to include income tax even before you take the leap to start your business. Cash preservation is king for starting a business.”