Mixed reaction to Autumn Statement

York Press: Mixed reaction to Autumn Statement Mixed reaction to Autumn Statement

BUSINESS groups have welcomed today’s Autumn Statement though calls have been made for more support, especially for families.

Chancellor George Osborne this morning revealed a number of measures aimed at supporting business, in particular helping high street retailers battle online trade.

Capping business rates at two per cent, Mr Osborne extended a relief scheme for small business, introduced a “re-occupation relief” for businesses transforming empty premises, and revealed a £1,000 rate-cut for business with a rateable value up to £50,000.

Frank Wood, chairman of the York Retail Association, said the moves will be welcomed by the city’s retailers.

He said: “Any help that retailers can be given locally or nationally is great because as we are coming out the recession trade is very difficult for many retailers.

“We are looking to improve York and make it a must visit place, and to do that we need to keep our retailers going.

“As a collective they are the biggest employers in the city, and among the biggest wealth creators. Anything to boost that is welcomed.”

For families the biggest boosts come from a cancellation of fuel duty rises, free school dinners for all children in reception, year one and year two, and an average £50 off energy bills through rolling back green levies.

There was also mention of a tax break for married couples, and personal income tax allowance will rise to £10,000 from April.

However some campaigners are calling for more to be done to support Britain’s poorest families.

Julia Unwin, chief executive of the Joseph Rowntree Foundation, said: “We heard much today about a responsible recovery, but a lot less about a fair one which helps those in greatest need.

“Today’s statement contained some encouraging economic news. However for the 13 million people living in poverty the measures outlined will not be nearly enough to tackle the rising costs and lower incomes that they face.

“Few of the policies announced today specifically target these families, who have faced a 25 per cent increase in the minimum cost of living since 2008.

“Neither do they fully address the root causes of their hardship, many of which, such as the rising numbers of low paid and insecure jobs, pre-date the recession.

“Higher housing costs, caused by insufficient supply, push three million more people into poverty as well as being a source of higher welfare bills. Likewise, our low pay jobs market means tax credits are needed to top up insufficient wage slips.

“We all want to see a lower benefits bill, but doing so in a way which does not address the underlying causes means we risk increasing poverty, not reducing it.”

In other moves aimed at supporting business and employment the Chancellor abolished National Insurance contributions for under-21s earning below £813 per week from next year, and said export finance capacity for UK businesses will be doubled to £50 billion to help firms break into emerging markets.

He also said HM Revenue and Customs will fund employers directly for apprenticeships with an extra 20,000 higher apprenticeships over next two years.

While he did not introduce a much called for review of the business rates system, Mr Osborne did reveal that rate rises will be capped at two per cent rather than being linked to inflation.

Susie Cawood, head of the York and North Yorkshire Chamber of Commerce, said: “The measures announced by the Chancellor to curb business rate increases are positive but not strong enough to boost companies’ cash flow and investment.

“The Chamber will continue to lobby the Government as we believe that that current system urgently needs reforming.”

Simon Williams North Yorkshire Regional Chairman, Federation of Small Businesses, said: “Action on business rates was the top priority for our members, and the Chancellor has addressed some of their concerns in the Autumn Statement. Too many businesses suffer from yearly price rises so capping business rates increases is a welcome measure.

“With around 300,000 firms relying on 100 per cent rates relief, extending the doubling of small business rates relief will be welcomed by many.

“Relaxing business rates for those firms that want to expand and incentivising new businesses into empty properties on the high street will boost retail and town centres retailers on struggling high streets will be especially heartened by the additional £1,000 relief.

“Youth unemployment is a deep concern – particularly those out of work for more than 12 months. Evidence suggests the longer a young person is out of work or training, the harder it is for them to secure a job.

“This surprise tax cut is recognition that extra efforts are needed to get young people into employment. This should be coupled with improving the education system to ensure that all young people hold the functional and soft skills necessary to succeed in today’s tough jobs market.

“We look forward to seeing further details to understand how small and micro businesses might benefit, including how this links with the Employment Allowance which comes into force next April.

“We welcome the principle of direct employer funding of apprenticeships. We have said Government needs to take its time with reforms to make sure it gets it right first time. It also needs to seriously consider how to make the transition smooth and keep small businesses engaged.

“Further consultation on proposals is needed because as it stands the proposed system could alienate the smallest firms from taking on an apprentice, at a time the Government is looking for more engagement.

“In particular many micro and small businesses will be put off engaging if the costs significantly increase. To keep participation rates up, it’s vital to consider how to make sure their costs don’t increase. Added to which the system must be easy to use and not expect upfront payments before the business can recover the Government contribution.

“The commitment to expand higher apprenticeships will help more and more young people think about this as a route into a career that leads them right to the top of business.”

Suzy Brain England, regional director for Yorkshire IoD welcomed the capping of business rates but summed up the statement in whole as a “mixed bag” for business.

She said: “The signal about a later retirement age is perplexing in the light of the need to find jobs for young people. It is possible that in this context we will see a rise in flexible approaches to employment with jobs being created as more people choose to work part-time as they get older.

“There seems to be a disproportionate investment in the infrastructure of the South and throughout next year our northern Local Enterprise Partnerships will have to work hard to get the best deals on the table to generate growth for business and the economy closer to home.

“I see that there is a planned reduction in bureaucracy in relation to car tax, shifting to an electronic solution. I welcome any introduction of technology that cuts costs and improves efficiencies for citizens and companies."

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