Business response to the Autumn Statement 2014

Phil Orford MBE, Chief Executive at the Forum of Private Business
“The Chancellor was keen to provide a much needed boost for Britain’s small businesses and there were some positive measures in today’s speech which will go a long way to helping reduce costs and improving business confidence. Whether this will be enough as we enter a period of uncertainty at the start of next year remains to be seen.

“Business rates have been an ongoing concern for a large number of our members, with 55% in a recent poll seeing this significant barrier to business growth. It is good to see that the Chancellor has agreed with our suggestions of short term measures to reduce the pain of excessive property taxation with continued a continued cap of 2%, a £1,500 discount for retail properties and an extension on Small Business Rates Relief. While we also welcome the Chancellor’s decision to answer our repeated calls for a proper review of the system and the way in which it is calculated, the devil will definitely be in the detail. With the review scheduled for after the General Election, we are keen to see all parties commit to making concrete moves to tackle an issue that many businesses feel has needed addressing for some time.

“On the announcements of further scoping and development of a Northern Powerhouse incorporating several major cities, and increased tax raising powers to Wales, Northern Ireland and Scotland, our members see this as a very positive further step in re-balancing our economy, not only in terms of financial services and manufacturing, but also in a commitment to support major regional and local development plans outside of London and the south-east.”

“While we applaud the increase in R&D tax credits – a successful driver for innovation, we would have preferred the relief to have been focussed on the formulation of a new Export Tax Credit to incentivise and support new exporters in riskier overseas markets”

Simon Burckhardt, Managing Director at Vonage UK
“This year’s Autumn Statement has brought more funding to the growing small business sector. The government has announced measures to strengthen lending to SMEs, unlocking a further £1bn of new finance. Osborne has announced an additional £400m to extend the British Business Bank’s venture capital programme, the Enterprise Capital Fund, as well as measures to increase the funding for the Enterprise Finance Guarantee scheme. This would enable the British Business Bank to guarantee up to £500m of new lending in 2015-16. The Treasury said that these two schemes together would help the Business Bank to achieve its aim of unlocking £10bn of finance for SMEs by 2017-18.

Any help to fuel the trend driving the creation of home-based and small businesses in the last few years is welcome. In last year alone, Vonage has seen 50% more uptake in small businesses signing up to our phone services. We hope this Autumn Statement will encourage more people to consider starting their own business.”

James Meekings, co-founder of Funding Circle
This Autumn Statement announces support for Peer to Peer (P2P) and crowdfunding platforms through a package of measures to remove barriers to their growth from regulation and tax rules. These include a new bad debt relief for lending through P2P platforms; a consultation on whether to extend ISA eligibility to lenders using crowdfunded, debt-based securities and an intention to review financial regulation which currently stands in the way of institutional lending through P2P platforms.

“This change in the tax system will make lending to small businesses via our marketplace much fairer for individual investors, putting them in an equal position to larger lenders such as banks. It’s something we have campaigned for since we launched four years ago, so we’re delighted with today’s news. More than 35,000 people currently lend through Funding Circle and the average investor could earn up to 25% more overnight per year as a result of this change. This could potentially be significantly higher depending on an individual’s investment strategy. It will have a hugely positive impact on the peer-to-peer lending industry and is a win-win-win for investors, borrowers and the economy at large.”

Ian Brinkley, chief economist at Lancaster University’s Work Foundation
“The extra support for apprenticeships is welcome but does not seem to be well targeted. There will be considerable deadweight from subsidising apprenticeships that would be provided anyway. Investing directly in the apprenticeship system, such as the Trailblazers initiative is crucial to producing high quality and longer term improvements.