North East business organisations have given a largely warm welcome to yesterday’s Autumn Statement.
As expected, the Chancellor, George Osborne, announced the rise in business rates bills from April 1 next year will be capped at 2% instead of being linked to RPI inflation. But a host of surprising bonuses were also featured, including a flat rate discount of £1,000 to retail businesses with rateable values of less than £50,000.
A 50% new occupation relief for previously vacant commercial and industrial premises was likewise announced, along with a raft of measures aimed at assisting small businesses, boosting vocational training, investing in infrastructure projects and getting young people into jobs.
Among those celebrating yesterday was the Federation of Small Businesses (FSB) in the North East.
Regional chairman Ted Salmon said: “The Autumn Statement represents steady progress, with a range of announcements that address members’ concerns in the cost of doing business, with action on business rates and confirmation that next year’s fuel duty rise will be cancelled.
“The statement is a sobering reminder about the scale of the deficit the country faces and the tough choices which need to be made.
“We therefore welcome the use of what spare resources the Chancellor could find to focus tax cuts on encouraging firms to take on younger workers, which must be an overriding priority.”
Among the measures announced was the removal of employers’ National Insurance Contributions for 16 to 20-year-olds, which Salmon regards as recognition that extra efforts are required to get young people into employment.
A commitment to expand higher apprenticeships would also help young people “think about this as a route into a career that leads them right to the top of business”.
Such moves were likewise welcomed by training providers like TTE, managing director of which, Steve Grant, said: “Creating an additional 20,000 higher apprenticeship places shows the Government is serious about vocational training.”
He warned, however, that these must be focused on industries facing skills shortages. Others in the business community, meanwhile, gave a more cautious response to yesterday’s announcements.
Rob Charlton, chief executive of the Newcastle-based _space architecture, for example, found several aspects of the statement “encouraging”, but added: “The most significant absence was any acknowledgement of a two speed recovery. The overall recovery is propped up by exponential growth in London. This hides some of the challenges still being felt in Northern cities.
“I would also have liked to see some tax breaks or incentives to bring jobs and investments to the regions. At present, the safe option is to invest in London.”
David Elliott, head of tax at KPMG in Newcastle likewise acknowledged that “businesses were Autumn Statement winners”, but added: “It’s a shame that the Chancellor again passed up the opportunity to introduce tax relief on capital investment.”
Bill MacLeod, incoming senior partner Newcastle’s PwC, meanwhile, pointed out that even most seemingly positive aspects of the statement had their downsides.
“The new 50% ‘reoccupation’ relief for small businesses on the high street could reduce the number of vacant shops but has the potential to be unfair to existing businesses who may struggle to pay full rates,” he said.