Autumn statement gets praise and brickbats
The Food and Drink Federation (FDF) praised measures to stimulate growth, exports and research and development. Retailers welcomed measures to ease business rates
Siemens UK & Ireland
But Siemens UK & Ireland said Britain needed a long-term approach to investment in manufacturing, engineering and infrastructure.
The National Farmers Union said it was disappointing that no mention was made of the annual investment allowance or encouraging investment in business infrastructure or managing business volatility.
Here we capture in quotes reaction to the Autumn Statement from a wide range of industry commentators.
Food and Drink Federation, director general Melanie Leech:
“It is great that the chancellor has announced measures to stimulate growth which should help the country’s largest manufacturing sector towards achieving its ambitious agenda to grow by 20% by 2020. Food and drink manufacturers are already strong exporters and the announcement of a £45M package to help exporters reach emerging markets will enable us to build on our success and to take our world-class products to new markets.
“As an industry that invests heavily in the future skills of its employees, the abolishment of National Insurance Contributions for apprentices under the age of 25 should encourage even more firms to take on young people. However, we would welcome further incentives to support upskilling through the apprenticeship route for over 25 year olds and to route apprenticeship funding directly to employers.
“FDF also welcomes the increase in R&D tax credits for small- and medium-sized companies [SMEs] to 230% and for large firms to 11%. Innovation is the lifeblood of the food and drink sector and these measures should provide a significant boost to a sector which is characterised by its vibrant SMEs.”
Siemens UK & Ireland, md digital factory Brian Holliday:
“We welcome elements of today’s Autumn Statement, particularly the financial support provided for high value manufacturing and exporters, tax incentives around R&D and the abolition of National Insurance contributions for employers taking on apprentices.
“As a company with manufacturing facilities in the north west of England, we are also encouraged by plans for continued support and investment in developing the ‘Northern Power House’. “The manufacturing sector was highlighted as growing faster than any other UK industry sector, and to ensure this growth is maintained we need measures such as the support for employers of apprentices and investment in high-value manufacturing catapult centres to continue.
“However, while growth forecasts for the UK have increased, productivity continues to stutter in the UK, so we need to ensure a long-term approach to investment in manufacturing, engineering and infrastructure is adopted, so we can all benefit from increasing prosperity. The chancellor certainly has a role to play in that.”
British Sandwich Association, director Jim Winship:
“Business rates have been a burden for small businesses for far too long and are generally out of kilter with current commercial property values. Footfall on Britain’s high streets, which is as important to cafes and sandwich businesses as it is to other retailers, is down 26% since 2007.
“This move by the chancellor is a long overdue step in the right direction in helping the high street to survive. We will happily engage with government and contribute to the re-organisation of rates.”
British Retail Consortium (BRC), director general Helen Dickinson:
“We very much welcome the commitment to undertake a comprehensive review of the business rates system. We want a system that brings investment and jobs to the high street without punishing retailers who trade online. The retail industry is the largest rates payer, contributing over a quarter of the total rates tax take.
“Today’s short-term support package will be of enormous help to those struggling to keep their businesses open on the high street. We look forward to playing a full part in the discussions that will take place with government on the reform of the system.”
“We are delighted that the chancellor recognises that voluntary schemes have room for improvement and agrees with our proposals to take a more careful approach so that customers and companies all benefit from well thought-out and properly-costed schemes.
“The retail industry employs an estimated 100,000 apprentices and any support for increasing the number of young people able to get a head start working in our world-beating industry is to be warmly welcomed. The BRC congratulates the chancellor on his recognition that apprenticeships are a great way to get young people into work. By eliminating employers’ National Insurance contributions for young apprentices the chancellor has made it much easier for businesses to take on an apprentice and give them the skills they’ll need to succeed.”
National Farmers Union (NFU) director of policy Andrew Clark:
“The freezing of fuel duty for a further year, exempting apprenticeships from National Insurance, and a further extension to small business rate relief all have the potential to help farmers. However it is disappointing that the changes to stamp duty land tax relate to residential property only.
“The chancellor again suggested a need for a more balanced national economy but confined this to building a Northern Powerhouse in northern cities. We think there is a need to encourage business investment and growth in productive capacity throughout the whole of the UK. It is disappointing that no mention was made of the annual investment allowance or encouraging investment in business infrastructure or managing business volatility – some of the NFU’s key asks in our submission.
“Although news of tax relief for business contributions to flood defences is welcome, it is disappointing that flood-related announcements all relate to pre-planned capital expenditure and do not address our concerns over maintenance investment. We will study all relevant announcements in greater depth, including the government departmental spending reductions and assess the full impact of the chancellor’s plans for agriculture.”
Confederation of British Industry, director general John Cridland:
“These major changes on stamp duty and business rates will be a shot in the arm for families and growing firms as they look towards 2015. The targeted focus on enterprise is right, but business innovators would have liked to see more on research and development to boost UK investment.
“International tax rules are in urgent need of updating. But the decision for the UK to go it alone, outside the OECD [Organisation of Economic Cooperation and Development] process, will be a concern for global businesses, and moving the goalposts on offsetting losses risks creating a worrying precedent.
“We welcome the continued commitment to deficit reduction, but real challenges lie ahead to reduce future public spending, and fresh thinking on public services will be essential. In the long term, growth is about people, science and infrastructure, and we warmly welcome the financial support for postgraduate students.
“We wanted to see action to tackle our clunky and outdated business rates system, so immediate help, by capping the increase and extending relief for small firms, coupled with a much-needed review, will be welcomed by businesses.
“Growing firms drive innovation in the economy, but they need access to finance to turn ideas into products and services. Beefing up the British Business Bank and continuing with Funding for Lending will help unlock their huge untapped potential. “But on their own, these measures will not shift the dial on business lending. The government must also promote alternative forms of finance and we were pleased to see initial steps taken to kick-start the UK’s private placement market.
“The modest improvement to the research and development tax credit and funding for research programmes are welcome but don’t mark the step change businesses were looking for. To compete on a global level we need to dramatically increase public and private investment in R&D, particularly on the commercialisation of ideas. Businesses want to see a more ambitious vision in the Science and Innovation strategy when it is published next week.
"The Roads Investment strategy will bring long awaited, practical improvements, and is a significant step towards much-needed upgrades to our road network, the arteries of our economy. Businesses will now want to see a shift from the drawing board to delivery.
“It’s right to support firms taking on young apprentices through National Insurance Contributions, but it’s important that this incentive isn’t eaten up by costs and red tape. More support for postgraduate study will help deliver the higher skills that businesses need. We must make sure the system works for part-time as well as full-time students.
“Businesses in the north will be encouraged by ongoing support for infrastructure and innovation. Improving transport links and investing in science and technology are vital ingredients for attracting new talent and investment right across the UK.”
Freight Transport Association (FTA), director of policy Karen Dee:
“Falling global oil prices have delivered significant reductions in fuel prices recently. While this has provided some welcome relief to operators struggling to keep goods moving in the busy Christmas period, it has also put prices close to the point at which fuel duty increases would be triggered. The chancellor should be congratulated for resisting the temptation to raise some additional revenue at the expense of the freight industry and other road users.
“FTA is a key funder and supporter of FairFuelUK, which campaigns for fuel duties to be reduced. As a result of the campaign, fuel duty is now at a far lower rate than it would have been, saving the logistics sector £4.44bn in extra duty had increases been introduced.
“The chancellor today announced that fuel duty would remain frozen at current levels and that the price-based trigger point for changes to both the supplementary charge and fuel duty, set by the Fair Fuel Stabiliser in 2011, would be abolished. We are, however, disappointed that the chancellor did not go further and cut fuel duties. Independent research has demonstrated that this could deliver a further boost to the UK economy and we will continue our efforts to persuade government to take action.
“The logistics industry is suffering a chronic shortage of drivers, which is adding further pressure at the busiest time of year. But this problem will extend beyond Christmas and it is essential that government works with the industry to encourage skills development within the sector and to identify innovative ways to incentivise the uptake of vocational training.”
Sainsbury, chief financial officer and BRC business rates group John Rogers:
“We welcome the full review of the structure of business rates. A clear consensus has emerged across businesses of all sizes and from all sectors – our current outdated system of business rates isn’t just a retail problem, but a business problem. We will be fully engaging with the review to ensure we get a new system which is fit for purpose in the 21st century.”
PriceWaterhouseCoopers (PwC), manufacturing leader Darren Jukes:
“The additional support being offered for investment in research and development and the creation of funds to encourage more UK manufacturers to export will be warmly welcomed by UK manufacturers. While the manufacturing sector has demonstrated strong growth over the last three years, the ambition of most UK manufacturers is to accelerate the pace of growth.
“PwC's recent innovation survey indicates that 76% of UK survey participants are aiming for growth over the next three years. The survey also highlights the importance placed on innovation by UK manufacturers with many now seeing it as a mainstream business-critical activity. The benefits of investment in R&D and the innovation driven as a result are also demonstrated, with the survey showing that companies that innovate grew on average 50% faster over the last three years than those that didn't.
“Innovation also plays a critical part in manufacturers' continual drive towards increasing productivity, as a means of improving their competitiveness in export markets.”
SmartCurrencyBusiness.com, director Carl Hasty:
“It is encouraging that the chancellor has addressed the issue of exports not reaching the government’s initial target of £1tn by 2020. The government needs to provide more support to UK businesses so that they can export to countries outside of the Eurozone, an economy which is currently stagnating.
“The £45M proposed by the chancellor is welcome, but companies still need more defined guidance on a number of issues, including breaking down barriers to entry, as well as guidance on how to save costs when embarking upon exporting. Sterling markets have reacted positively to the Office of Budget Responsibility’s revised forecasts of a 3% increase in gross domestic product growth and 5.4% decrease in unemployment. However, the outlook for sterling is still uncertain in the long-run, especially given the increase of global risk, which has the potential to affect sterling significantly.”
Institution of Engineering and Technology (IET), head of policy Paul Davies:
“Innovation is important to the UK as it affords an opportunity to create new high value jobs to contribute to an improved UK economy. Recent studies have demonstrated the importance of the role government plays in successful innovation in business.
“The extra finance announced will help the UK lead the next generation of technologies such as printable electronics, robotics, and carbon fibre composites here in the UK. This investment will help around 250 more UK companies get new and better products that they need to go to market faster in key manufacturing sectors like aerospace and automotive. This is expected to generate an additional £745M to the UK economy.
“But longer-term support is needed. The IET believes that the next government will need to act in five different areas in order to achieve innovation success in the period 2015 to 2020.”
Money&Co, ceo Nicola Horlick on the chancellor’s commitment to remove barriers of growth to peer-to-peer and crowdfunding platforms:
“The chancellor’s announcement shows a real commitment to what is already a revolutionising industry within the financial sector. Peer-to-peer business lending is helping savers get a better return on their money, while allowing them to be a full participant in the investment process. I want more people to benefit from being part of the consumer-focused financial services revolution. By using platforms like Money&Co, people can earn a higher rate of interest, while supporting UK SMEs.”
Association of Convenience Stores, chief executive James Lowman:
“We are delighted that the chancellor has listened to our concerns on business rates by committing to a full review. Local shops will welcome the 2% cap on rates increases and the extension of the higher threshold for small business rate relief, alongside the increased £1,500 rates discount for shops on the high street. We are committed to rates reform that works for local shops and will play a full part in the review in the coming months.”
The Centre for Process Innovation (CPI) ceo Nigel Perry
“I am delighted with the chancellor's announcement of the £28M National Formulation Centre. This is a key investment for the Industry and it will give industry a unique capability to enable [companies] to create new products.
“It is also great news for CPI who will establish and manage the centre, thus building on our position and success as the National Innovation Centre for the process industry and as a partner in the High Value Manufacturing Catapult. The new centre will catalyse manufacturing-based growth by developing a globally unique capability to develop and deliver the next generation of formulated products and processes across a wide range of market sectors.
“We will provide both large and small companies with open access facilities to optimise their formulated products and prove their benefits in a wide range of applications, thereby reducing risks associated with product development in this growing global market.
“The centre will be located at NETPark in County Durham and this will help cement NETPark’s position as a leading innovation and technology campus in the North of England.”
Forum of Private Business, chief executive Phil Orford:
“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.
“Announcements of additional British Business Bank and the extension of the Funding for Lending scheme are also welcome measures to address ongoing small business confidence issues around the ability to obtain the finance they need to grow.
“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 focused on the formulation of a new export tax credit to incentivise and support new exporters in riskier overseas markets.”
