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East Midlands Chamber News

Chris HobsonReacting to today’s Autumn Statement, Chris Hobson, Derbyshire and Nottinghamshire Chamber of Commerce’s Head of Information and Representation, said:

“The Chancellor started his statement by saying that there was no money available for big gestures, and he delivered an announcement that produced no rabbits from hats and no sensational headlines.

“The Chamber welcomes the two per cent cap on Business Rates but believes it doesn’t go far enough. A freeze on Business Rates would have given firms of all sizes more confidence.

“A £1,000 refund on Business Rates for premises with a rateable value of £50,000 and under is also welcome, as is the halving of Business Rates for new shops. Allowing businesses to pay their rates by monthly instalment instead of up front in a single lump sum will also improve cashflow for many smaller firms.

“But it is very much tinkering at the edges and only a full and robust reform is going to make any significant difference. The whole process is fundamentally flawed and in urgent need of reform. This Autumn Statement was an opportunity to announce and drive that reform and it hasn’t happened, which is disappointing.

“The Chamber has lobbied in the past for Corporation Tax to be held or even cut and it is good news that the Chancellor has not increased it for the next financial year.”

On getting young people into work, the Chancellor tasked Jobcentres with making sure anyone under the age of 21 was actively encouraged to find work and if they had not done so in six months then they will have to get them on to Traineeships.

“This is all well and good but doesn’t address one of the key issues which frustrates employers, namely that young people don’t leave school and college with the skills which make them employable,” said Chris.

He added: “It’s also essential that any initiatives such as this do not add to the burden of business through additional red tape.

“Removing National Insurance Contributions (NICs) for workers under the age of 21 could encourage recruitment of young people, but the benefit would only really impact any young person earning more than the minimum wage as NI is not payable on minimum wage.”

The Chancellor’s comments regarding commitment to long-term infrastructure improvements, such as the HS2 rail link, were welcomed but, Chris said “the projects must be delivered, not just talked about”.

And on the Chancellor’s comment about job cuts in the public sector being offset by recruitment and growth in the private sector at a rate of three-to-one, Chris said: “The Government is going to have to do much more to continue to stimulate private sector growth to encourage investment and recruitment in the private sector.”

He concluded: “The growth predictions given in the Autumn Statement for the next few years are predicated on a growing economy but there was nothing in this statement that is obviously going to stimulate the growth needed to achieve those figures.

“I think it likely that the figures will be revised year-on-year as the economy evolves.”

Additional comment on specific measures announced in the Autumn Statement

On apprenticeship funding:

“The Government will develop a model which uses HMRC systems to route apprenticeship funding direct to employers [consultation on the technical details and alternative funding route for the smallest businesses in early 2014]. Employers support the idea that they should have a greater say over how apprenticeship funding is used.

“At the same time, though, we are pleased that Government has listened to the warning that funding apprenticeships through the tax system may not be suitable for all companies. We support the concept for those companies that want to take greater control over apprenticeship funding, but there need to be alternatives for those who cannot take this task on.

“Businesses already pay huge amounts to train their employees, both young and old. So we remain adamant that the training costs of the youngest apprentices should be met by Government in full as they are at present, with employers responsible for their wage and mentoring costs.”

Abolishing employer NICs for over-21s:

“This measure will encourage many businesses to take on young people, as it will help reduce risk and cover the costs of the additional training that under-21s so often require in the workplace. Abolishing employer NICs on under-21s will open up new opportunities to those entering the labour market straight from school and college.

“However, we are concerned that some companies might find it difficult to keep these young people on after their 21st birthdays, when employer NICs would kick in, as well as having to pay the adult rate of National Minimum Wage. We would urge the Government to consider some sort of taper, so that we avoid seeing people who are hired at 18 or 19 let go when they reach 21. A taper would also mean that over-21s are not disadvantaged in the job market.”

On energy security:

“Energy security remains a huge priority for British businesses. We welcome new tax allowances that will help kick-start start the exploration of on-shore oil and gas, including shale gas. All energy sources must be investigated as serious contributors to our national energy needs. Britain must continue to support its oil and gas sector, both on-shore and off-shore, as well as investing in new nuclear and renewables.”

On export support and business finance:

“The doubling of the amount of business that UK Export Finance can support is a welcome boost to exporters. We would like to see its regionally-based export finance advisers working hand-in-glove with DNCC and other Chambers of Commerce, which are the premier private sector providers of export support.

“If Government can take the hugely positive step to back British exports to the tune of £50bn, it should also back the British Business Bank at a similar scale – to ensure we have access to finance for today’s growth companies, who will become tomorrow’s export champions.”

On infrastructure:

“The Chancellor’s comments, which follow the announcements on the revised National Infrastructure Plan, are welcome. But Government’s commitment to improving the UK’s outdated infrastructure can only be properly judged when projects are being built, rather than by the number of aspirational strategies produced. All too often new infrastructure projects are promised and not delivered.

“Business is counting on Government to finally break that cycle, by ensuring that the infrastructure projects that underpin business growth go from the drawing board to reality on the ground.”