Autumn statement 2023: Reactions from the business community

The Chancellor of the Exchequer, Jeremy Hunt, presented his Autumn Statement to Parliament today (Wednesday 22 November), with an eye on unlocking business investment, rewarding effort and work, growing the economy and backing businesses. We’ve gathered some reactions from the business community…

Richard Godmon, tax partner at Menzies LLP

“Bearing in mind that we’re now on the path to a general election, we expected significant announcements to come out of today’s Autumn Statement. The overall impression, however, is that the Chancellor could have gone much further if he wanted to kickstart the UK economy into action again.

“SMEs are arguably the engine room of the economy, and it was particularly disappointing to see them largely left out of this statement with the exception of the freeze to the small business rates multiplier.

“Even the headline announcement for businesses – that full expensing will become permanent – only applies to companies, and will not help the many thousands of unincorporated businesses that are crucial to the economy.

“When it comes to the business environment, I’d give the Autumn Statement a 6/10 for the likely impact it will have on growth, investment and boosting productivity. I expect to see much more in the 2024 Spring Budget if the government wants to go into the election with a stronger outlook.”

Emma Gibson, South hub and Reading office senior partner at KPMG

“With high interest rates and capital costs set to cast a shadow well into next year, small business in the South East will welcome today’s commitment by the Chancellor to extend both the 75% retail, hospitality and leisure relief and small business multiplier freeze, as tangible steps to helping reduce cost pressures and allow them some space to find a more secure foothold after a long period of uncertainty.

“Newly announced funding for British manufacturers operating in strategically important sectors is also a positive step, but this must find its way to major employers in the South East. As a region, we perform strongly across aerospace and electronic manufacturing but, with ongoing challenges around talent recruitment and retention, as well as low investor confidence, this commitment will hopefully go a long way to shoring up these sectors here.

“The Chancellor has ensured that homegrown science and technology businesses will be prioritised, with a new fellowship course for investors to encourage greater investment and innovation in these key sectors.

“As a major hub for life sciences and home to a rich network of renowned research centres, the South East has no shortage of talent and expertise in this area, but deeper investment is needed to fully enable its development. This new scheme has the potential to boost the prospects of the South East’s existing life sciences ecosystem by training a dedicated generation of new investors.”

John O’Mahony, partner, practice leader at Gatwick office of Grant Thornton UK LLP

“There were some headline-grabbing measures to unlock growth in today’s Autumn Statement. Many UK regions have focused on the example set across the South East by developing the science and innovation economy. Making available an additional £500 million to fund innovation centres to make the UK an ‘AI powerhouse’ sounds progressive.

“Of the other headline measures, making permanent the full expensing of capital expenditure will support big business.

“As a nation, we really can’t do enough to address the skills gaps in a wide range of industries so the £50 million to support apprenticeships in engineering and other key sectors is going in the right direction.    

“Decarbonising how we live and work is the challenge of our times, and whilst there are some encouraging measures around clean energy to access the grid, doubtless there is scope to do a great deal more.”

Paul Lavercombe, head of tax for BDO LLP in the South East

“In the lead up to this Statement, the Chancellor had warned that tax cuts were ‘virtually impossible’ but the mood music changed significantly in the last week or so, and for business, this has arguably been a more upbeat announcement than anticipated. 

“The “giveaways for growth”, such as extending full expensing on investments in IT, machinery and infrastructure, have responded to demand from businesses for a greater focus on creating economic certainty over the long-term. However, with a General Election looming, it remains to be seen whether today’s announcements will be enough to create widespread confidence and incentivise business investment.

“Beyond the headline tax changes, businesses called for wider support to ease their day-to-day burdens including further investment in HMRC to improve service levels and measures designed to simplify the tax system. Many may be disappointed that the chancellor didn’t go far enough in this regard.” 

Jonathan Rolande, spokesman for the National Association of Property Buyers

“The Local Housing Allowance Increase is to be welcomed. Rents have increased dramatically in recent years and a higher allowance means tenants will be more able to keep up with their rent payments. That said, it may be seen by some landlords as an opportunity to push up rents even further, fuelling inflation in the sector.

“The announcements around planning were not predicted and came as a surprise. Making homes easier to split makes good sense – two households in the space of one – but in reality, few homes lend themselves to this kind of conversion and the cost of work can be very high. We won’t see the opportunity taken by most owners.

“Payments for those near vital electricity infrastructure is a good idea. The devil will be in the detail, but a bonus payment as well as normal rights to object should placate many worried about the effect on property values.

“In effect, fining Local Authorities for slow planning decisions will focus the mind, but many blame a lack of resources already – with even less money, how it works in practice will be interesting to see and only time will tell.

“It was disappointing not to see Mr Hunt use stamp duty in a targeted way to try and inject new life into areas of the market, and I’d have liked to have seen him present a more ambitious roadmap to getting house building going again. But these measures are unlikely to dent confidence in a fragile market and they could help pave the way towards brighter days in the New Year.”

Damon Anderson, UK MD at Employment Hero

“Small businesses power our economy and employ 16.7 million people across the UK, yet many face a real possibility of bankruptcy without government help. Insolvencies are at their highest rate since the Global Financial Crisis and those in the hospitality and retail sector are under particular strain.

“It was absolutely essential for the Chancellor to keep business rates frozen, particularly for struggling high street stores who were facing a cliff-edge in April that would have sent that insolvency rate even higher. But retail stores still face several obstacles the Chancellor failed to address today, most notably the tourist tax.

“Small firms are also struggling to recruit. The age change for the national living wage and the largest boost to the minimum wage ever will make some SMEs struggle to afford new staff. Our research shows this is an issue across the SME sector – from small shops to white-collar firms that are seeing staff use them as a ‘salary springboard’ to higher-paid jobs at larger companies.

“Employment Hero is geared up to revolutionise workforce reintegration following Jeremy Hunt’s plan to tackle the decline in workforce participation since the pandemic and fill the one million live vacancies.

“Employment Hero poised to assist the long-term unemployed, aligning with the government’s objective of making it easier to get back to work.

“The tech firm’s Swag app will support a reduction in the 7 million unemployed, instead channelling job seekers directly to SMEs in key sectors like hospitality, retail, construction and care, as well as helping the 700,000 individuals with health conditions looking for work-from-home opportunities.”

“With discussions already underway with the Prime Minister’s chief business advisor, Employment Hero aims to alleviate dependency on benefits by fostering sustainable employment pathways. Pending government action, Employment Hero stands ready to transform the job market landscape.”

Christiana Stewart-Lockhart, director general of the Enterprise Investment Scheme Association (EISA)

“The extension of the EIS is excellent news for early-stage business growth in the UK. Entrepreneurs are now able to seek much-needed investment with the confidence that the EIS will still be available to support their future growth beyond April 2025.

“The current economic climate has definitely been a challenge for many entrepreneurs and this announcement about the EIS will provide some much-needed reassurance for entrepreneurs and investors across the UK.

“Today’s announcement is fantastic news for startups in all regions and devolved nations. This is a world-leading scheme. Its success in fostering innovation and entrepreneurship, as well as economic growth, has been internationally recognised and it’s great to see the Government backing British businesses in this way. The government’s emphasis on the importance of entrepreneurship in our economic recovery is very welcome.”

Nick Farr, partner and tax lead at PwC for South East

“The commitment to reducing taxes for 29 million people, allowing working families to retain more of their earnings, was one of the key highlights in today’s Autumn Statement. However, when considering the broader perspective, the tax level remains relatively high as a proportion of the economy.”

“The permanent extension of the tax break, enabling companies to reduce their tax by 25p for every £1 spent on plant and machinery, stands as a historic moment for British businesses. Touted as the largest tax cut in modern British history by the Chancellor, this commitment not only fosters nationwide economic growth but particularly positions the South East to reap substantial benefits, stimulating local industries and encouraging heightened investment in the region.”

“Within the South East, we have numerous world-leading life sciences, advanced manufacturing and technology companies that will hopefully benefit from the focused incentives being offered to businesses in these sectors. Any initiatives promoting increased house-building will be welcomed in highly populated areas in the South East.

“This will not only benefit residents but also contribute to the growth of the house-building and construction sectors, both of which play a crucial role in our regional economy. Businesses, in general, will appreciate the permanence of full expensing for capital expenditure.”

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