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East Midlands Chamber News

Autumn Statement Could Have Gone Further On Growth (Updated w/video)

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Reacting to the Chancellor’s Autumn Statement, Derbyshire and Nottinghamshire Chamber of Commerce Chief Executive George Cowcher said: “There were a number of positive announcements in the Chancellor's statement today which will be welcomed by local businesses*, including investment in transport and housing infrastructure; boosting collaboration between businesses and universities; bringing the next wave of ultra-fast broadband technology to Derby; and reducing vehicle running costs for motorists and businesses alike.

“Businesses will also welcome announcements about significant new temporary capital allowance increases to encourage investment by SMEs and moves to ease the flow of credit to viable firms by a dedicated business bank.

“However, whilst it's only right that the austerity measures must continue to bring down the deficit and keep the economy stable over the remainder of this Parliament and beyond, this year's Autumn Statement didn't go far enough to promote job creation and business growth.

“What we need to see is real urgency in the delivery and implementation of these schemes and initiatives to ensure that they are as effective as intended.

“Only a wholesale re-prioritisation of resources to unlock private sector finance, investment and jobs, will be enough to secure the recovery and underpin the future economy based on exports, manufacturing and innovation that the Government aspires to.”

* An at a glance guide about the impacts the Autumn Statement will have on the East Midlands can be viewed by clicking here, whilst a policy-by-policy grid of changes can be viewed here.

Commenting on specific measures in the Autumn Statement, George Cowcher said:

ON CAPITAL ALLOWANCES FOR INVESTMENT

“More than £700bn is currently parked on business balance sheets, so it's good to see that the Chancellor has listened to business and is improving incentives for investment by SMEs by raising the annual investment allowance to £250,000 for the next two years.

“These stronger incentives will encourage SMEs to dust off their investment plans and get moving. If they have the confidence to move ahead with investment, their productivity will improve, their suppliers will benefit, and the export potential of UK plc will rise.”

ON AIR PASSENGER DUTY

“It was disappointing once again to see the Chancellor did not cancel the planned 2.5% hike in Air Passenger Duty. It's crucial that the UK gets it right on aviation which, in the Chamber's view, means the introduction of a system which incentivises the growth of regional airports through discounted taxation, to make it more economically attractive for airlines to consider moving out of the UK's busiest and most congested airports and relocate to the regions instead.

"This would open up new local routes and services, help promote job creation, support inward investment and development and strengthen the regions' international trading links.""

ON EXPORTS AND INTERNATIONAL TRADE

“DNCC's Autumn Statement submission called for greater investment in trade and export support to help companies break into new markets across the globe. Exporting businesses will welcome the commitment of £70m in new funding, as long as it is used to help them strengthen their exporting capability and to exploit opportunities in fast-growing markets overseas.

“It's good to see recognition from Government of the crucial role played by Chambers of Commerce, both here in the UK and overseas, as a unique resource for exporters, and as the first port of call for traders the world over.”

ON INFRASTRUCTURE

“Prior to the Autumn Statement, DNCC also called for massive investment in infrastructure, so today's announcement that current spending will be cut by £5bn to invest in infrastructure is extremely welcome.

“However, this commitment is just the tip of the iceberg. It’s not radical enough to unlock the resources needed to maintain and improve Britain’s business infrastructure. We also need clarity over which infrastructure schemes locally are being prioritised by Government, how much funding is being allocated to each one and a proposed timescale for their completion to ensure that businesses can plan ahead effectively.

ON HOUSING

“The measures introduced today include a commitment of £72m to build more than 4,000 new homes for affordable rent and a further £16.1m to return over 1,300 empty homes back into use, both of which are welcome.

“However, the Chancellor’s reconfirmation of £10bn in guarantees for the housing sector should have gone further and there should have been a further commitment to building 100,000 new homes nationwide, which would deliver construction jobs, business for supply chains, and local confidence.”

ON BUSINESS FINANCE

“After poor early results from the Funding for Lending scheme released earlier this week, it was good to see the Chancellor use the Autumn Statement to re-confirm his strong support for the creation of a £1bn British Business Bank.

“It was disappointing, however, that the Chancellor was unable give a clearer timetable for the bank’s creation. Britain’s business finance system is dysfunctional and restrains growth. The creation of a new, patient lender would be a game-changer for dynamic and growing companies seeking to expand here in the UK.”

ON THE HESELTINE REPORT AND LOCAL GROWTH

“Whilst the Chancellor will not publish its formal response to the Heseltine Review until the spring, he did endorse Lord Heseltine’s proposal for more local control over economic growth funding in England. The question is whether this proposed shift from central to local control will actually happen in practice, or whether it will be scuppered by Whitehall.

“Chambers of Commerce are great advocates of local solutions for local growth. DNCC has and will continue to work closely with the D2N2 Local Enterprise Partnership and its other partner organisations to build stronger places, stronger business support, and stronger exporters.”

ON PENSIONS

“The introduction of a lower annual pension contribution limit of £40,000 is a disappointing move from a government that labels itself pro-growth.

“For aspirational entrepreneurs and businesspeople, the ability to make significant pension contributions while taking major risks is a huge incentive and enables them to make up for lean years when times are better. We fear that this move will stop many dynamic entrepreneurs from doing all they can to create growth and jobs.”

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