Alistair Houghton, Neil Hodgson and Bill Gleeson report on reaction to the Autumn Statement
MERSEYSIDE business leaders have applauded Chancellor George Osborne’s Autumn Statement.
His fillip for the business community, particularly small- and medium-sized enterprises (SMEs), was described as “stunning” in some quarters.
Liverpool Chamber of Commerce hosted a members’ viewing of the live statement from Parliament and reaction was extremely positive.
Chamber chairman John Sutcliffe, who is also chair of Liverpool-based engineering consultancy Sutcliffe, said: “It’s a pretty good statement for business.
“The corporation tax and capital allowance changes are good for business overall. The decision not to introduce the 3p fuel duty rise will help businesses, as it will help everybody.”
From the perspective of his business, he welcomed news that the empty property rate exemption for new build commercial premises would be extended from October and said: “Rates are something our clients have complained about. This can only encourage development.”
Mr Sutcliffe also welcomed the Government’s commitment to investment in infrastructure, but said it needed to ensure the North benefited.
He said: “The investment in housing is good. It will help the economy. It depends on how it’s spread regionally.”
The Chancellor announced that the Annual Investment Allowance for plant and machinery would rise from £25,000 to £250,000, allowing firms to spend more without incurring tax costs.
The Chamber’s new chief operating officer, Jenny Stewart, said: “I think that is stunning for businesses.
“Businesses at the moment are not particularly investing. They’re not going for finance. They’re sitting on money in the bank because they don’t know what they’re going to do with it.
“The tenfold rise means they may be encouraged to spend some of that money to build the infrastructure of their organisations and to invest in equipment.
“That will then help them to grow and employ more people.”
She added: “We’re very encouraged by some of the Chancellor’s announcements with regards to encouraging business.
“Certainly, the devil is in the detail. Investment in transport, roads and infrastructure is certainly good news. It looks at first glance as though a lot of that money will go to the South, which is less good.
“But it sparked some discussion today about the importance to our economy of port access.”
Ms Stewart also welcomed the cut in corporation tax, which she said would “encourage foreign inward investment”.
And she also praised the announcement of increased funding for UK Trade and Investment, saying: “They are looking for businesses that will come here, invest and employ people.”
Ms Stewart admitted: “I was expecting it to be a much tougher statement.
“I wasn’t expecting quite so much money to be put back into the economy.”
Catherine Fairhurst, Liverpool tax partner at Ernst & Young said the change to the Annual Investment Allowance was the fourth in five years, but said: “While such rapid changes could look incoherent, these incentives are clearly linked to the state of the economy and can accelerate investment.
“At a time of economic need, such yo-yo policy changes can, nevertheless, be rational.”
Small business lobby groups also gave the thumbs-up to the Chancellor, with the Forum of Private Business (FPB) describing his Autumn Statement as a helpful springboard for UK economic growth in 2013 and beyond.
FPB chief executive Phil Orford said the axing of the rise in fuel tax was a huge boost: “A 3p rise in January would have been nothing short of economic vandalism in the current climate.”
The Forum also pointed to more good news for SMEs in the shape of an extension to Small Business Rate Relief, and the 10-fold increase to the Annual Investment Allowance. Mr Orford said: “There are big savings to be had here for firms who’ve been waiting for the right time to invest and upgrade equipment, and this kind of spending tends to wash right down the supply chain.”
Federation of Small Businesses regional chairman and national vice chairman John Allan said: “Small businesses are Britain’s most precious resource and, for too long, they have been overlooked and undervalued.
“In this year’s Autumn Statement the Chancellor has clearly listened to what the Federation has had to say. He has gone a long way towards restoring the trust of small firms by announcing significant measures on tax, in particular, to boost growth alongside his austerity drive.”
Another aspect of the Autumn Statement was highlighted by Hillary Griffin, senior tax consultant at Liverpool accountants Duncan Sheard Glass, who said: “From an entrepreneurial viewpoint, there’s an opportunity to invest in AIM (Alternative Investment Market) businesses through your ISA.”
Meanwhile, manufacturers hailed efforts by Mr Osborne to encourage growth and David Ost, North West director of manufacturing organisation EEF, said: “The Chancellor demonstrated that he has hands firmly on the levers of growth and is pulling them to support growth which is driven by exports and investment.
“However, the scale of the challenges our economy faces means we cannot afford to take our foot off the gas.”
He said Government encouragement to double our exports by 2020 has driven concrete action and urged: “This clear sense of priorities must now drive the decisions it takes in next year’s Budget and Spending Review.”
Tony Reddin, tax director in the Liverpool office of Grant Thornton, said: “It was more positive than we anticipated for companies and SMEs.
“Some of the economic statistics were pessimistic, but there were some nuggets of good news.
“Some of the measures will stimulate SMEs to grow locally. The increase in the Annual Investment Allowance came on the back of a couple of reductions on the previous years.
“That’s a hugely positive measure that will cover 99% of SMEs seeking to invest in capital equipment.”
However, Karl Vella, managing director of Skelmersdale-based car repair specialist Karl Vella Group felt more could have been done to help recruitment and training.
He said: “I’ve long pushed for a system where you could pay apprentices aged up to 30 a first-year wage. That would get many people off benefits.”
And the Federation of Master Builders (FMB) said the Chancellor missed a trick by not offering more support for energy efficiency in the home.
Brian Berry, FMB chief executive, said: “The Chancellor should have taken the opportunity to support the Government’s own Green Deal energy-efficiency initiative by introducing more incentives, including a lower rate of VAT on housing repair, maintenance and improvement work to encourage homeowners to take advantage of the Green Deal.
“Local building companies are best placed for this type of work, but are reluctant to jump through the hoops involved without stronger market demand.”