Autumn Statement: Some Good News for SMEs

Autumn Statement 2013The Chancellor, George Osborne, has delivered his Autumn Statement 2013 and given some breathing space to small businesses with a number of measures

George Osborne, the Chancellor of the Exchequer, has addressed the house with his Autumn Statement 2013, setting out the government’s financial plans and looking at its progress so far.

Sticking to the coalition government’s austerity budget, Mr Osborne, has said that growth forecasts for the year have improved with the rate rising from 0.6% to 1.4%

But the Chancellor was keen to stress that "the job is not yet done".

Looking directly at the announcements he made for the benefit of UK businesses, Mr Osborne will cap business rate increases to 2% next year, below the current rate of inflation which stands at 2.2% (CPI) and 2.6% (RPI) – the business rate cap will come into effect from next April.

Another move by the Chancellor was to offer a £1,000 discount on business rates for new retail businesses over the next two years.

Employer National Insurance (NI) contributions for the under-21s have also been removed, placing less burden on businesses.

Another measure that will help not just consumers but business motorists is the freeze on fuel duty rises – Due to go up by 2p a litre from next year, The Chancellor claimed that fuel was 20p a litre cheaper that it might otherwise have been.

The reaction from business groups has been mixed.

Alex Jackman, the Head of Policy at the Forum of Private Business, said of the announcements:

“There are some positive measures in today’s speech to help reduce the costs of doing business. With fuel duty frozen, £1,000 rebate on business rates and a subsidy on employing young people, there are measures worth thousands to small businesses. Within a time of constrained budgets, it’s good to see the Chancellor has listened to the concerns of small businesses around rising costs.”

Jackman pointed out that other issues were not directly addressed in this latest Autumn Statement but were still being discussed, such as the problem of energy prices and his hope at "reining back" green taxes.

Luke Lang, the co-founder of equity crowdfunding platform Crowdcube expressed his concern that the Government was still focusing on debt finance when it should be working on supporting equity investment for the high growth startup phases of small business.

“The Government has already lent £100 million through peer-to-peer lending websites (via the Business Finance Partnership) and has more plans with Vince Cable’s Business Bank. This demonstrates a real ignorance about the types of finance that are needed by Britain’s future entrepreneurs.”

Lang continued:

“Our message for the Government is you’ve done enough with debt finance, now let’s focus on what small businesses really need. Creating a co-investment fund for Britain’s burgeoning equity crowdfunding industry would be a great place to start.”

On the issue of National Insurance, Rosana Mirkovic of ACCA, the Association of Chartered Certified Accountants, added:

“Reducing National Insurance contributions for young people could help small businesses, however, whether this is aimed at helping SMEs or get young people off benefits is an important distinction. SMEs in the UK are calling for a more skilled workforce, not an unskilled one.”

The full details of the Chancellors announcements are published in the full version of the Autumn Statement 2013 (2.33Mb PDF).

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