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Autumn Statement 2015: Bring us all some Christmas cheer, please Mr Osborne

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Written by:   | Posted 26-November-2014 13:36

Autumn Statement 2015: Bring us all some Christmas cheer, please Mr Osborne

This time next week, Chancellor George Osborne will be delivering his final Autumn Statement before next year’s election. Gavin Thompson looks ahead at what’s in store and asks what business would like as an early Christmas present


The story of 2014 has been one of growth and recovery, up to now. But higher borrowing and concerns over the impact of the economic performance of the Eurozone, Japan and others mean George Osborne won’t have such a big sack full of presents to giveaway in the inappropriately -named Autumn Statement next week.

But that doesn’t mean we don’t all have long lists of requests. We have been good after all, investing in growing our businesses and creating jobs. As one of the few regions that actually contributes more to the Exchequer than it gets back, Bristol has been especially good this year.

So what do we all want? Top of the Bristol Post’s Christmas list is reform of business rates.

The Post is campaigning for a wholesale review of the tax to break the tie with property that stifles business growth, to give more local control over how the proceeds are spent, and for a simpler system which business can understand.

And we’re not the only ones. Business West, for example, is also calling for movement on business rates.

The organisation’s managing director Phil Smith said: “If we were to ask George for three presents before Christmas, it would be giveaways on business rates, infrastructure and apprenticeships.

“With a feeling of deja vu, here we are again asking the Chancellor to cut costs and reform the broken business rates system. For those of you with keen policy memories you may remember the call for a freeze in business rates this time last year, which the Chancellor briefly tamed with a two per cent cap on inflation and the introduction of a rate discount to help the high street.

“However, this didn’t go far enough and yet again we cry out for reform to this crippling tax which hits firms before they make a profit.”

Phil, right, said closing the skills gap, particularly among young people, was key to achieving long-term growth.

“Youth unemployment remains stubbornly high despite total unemployment at its lowest since 2008,” he said. “Firms consistently tell us about skills shortages and we are working hard to ensure better links between education and business. We urge the Chancellor to use tax cuts to incentivise this.”

And finally, Business West wants more investment in infrastructure.

Phil said: “Infrastructure is at the core of British business, underpinning confidence and competitiveness, but the UK remains off pace with delivery.

“We already know that the Autumn Statement will contain plans for a £15 billion Roads Investment Strategy, but the government must address the ever-poorer state of Britain’s existing roads as well as adding much-needed new ones and revving up the delivery of key projects, with many of these progressing at a glacial speed.”

Infrastructure is also the focus of the demands of the Confederation of British Industry.

Director General John Cridland, right, said: “We know firms are concerned about the state of our roads and energy supply and affordability, so the arrowhead of business recommendations is a major push on improving the country’s infrastructure. Businesses want to see the Government set out clear project plans, with start dates and timescales.”

The Government has heavily trailed some infrastructure announcements, including plans to make the A303 in Somerset dual carriageway. But more money for road and rail improvements in the Bristol area would be welcomed by businesses locally, in particular the plans to create a better suburban rail network under the MetroWest banner.

The CBI is also calling for tax changes to encourage innovation, a move likely to find strong support from Bristol’s strong tech sector.

John said: “We want to see the Government encourage innovation and enterprise by expanding the R&D tax credit to encourage development, as well as research activity.”

And he added a freeze on long-haul air passenger duty would help small businesses to export products and services to growth markets such as Mexico and Indonesia.

Exports is an interest shared by the Association of Chartered Certified Accountants.

Head of taxation Chas Roy-Chowdhury said: “Within the confines of EU competition law we ought to consider offering a form of R&D style credit for SMEs which export.”

But he said most important was stability.

“We should ensure we do not get tax shocks, but that changes are thought through and properly exposed,” he said. “We have an extremely complicated tax system and further tinkering to aid one industry or another will just add to this further. The best thing for the economy would be a period of stability to help businesses plan for future.

“Without certainty, neither governments nor taxpayers can effectively budget or plan for their future actions.”

Accoutancy firm Bishop Fleming thinks the perfect Christmas bonus for many smaller businesses would be to scrap the roll out of auto-enrolment pensions.

Managing partner Matthew Lea, left, said: “It is costly to administer; it would be so much cheaper and easier to increase National Insurance payments, with those revenues ring-fenced for a better state pension.”

It would be a major shock if that wish is fulfilled, however, as pension reforms have been among the most radical steps this Government has taken and will be its main legacy.

A survey of mid-sized companies by business and financial advisers Grant Thornton found almost half (48 per cent) liked the idea of a single and dedicated HMRC contact who knew their businesses.

Allister Weir, partner and head of tax at Grant Thornton in the South West, said: “We are continuing to call for personalised account management for medium sized businesses by government and a dedicated team to look at their issues, which would provide the focus needed, while also identifying any cumbersome processes that should be removed.”

There are plenty of presents the business community is hoping for. But are any of them likely?

Paul Falvey, left, tax partner at business advisers BDO in Bristol, put it: “Now that the political parties are gearing up for next year’s general election it is likely that the political decision making process will become bogged down. The fear is that the forthcoming Autumn Statement will not escape this and as a result turn out to be a damp squib.”

Just a tangerine and maybe a lump of coal then.


What is the Autumn Statement?
Officially, the Autumn Statement provides an update on the government’s plans for the economy based on the latest forecasts from the Office for Budget Responsibility (OBR).
The forecasts, called the economic and fiscal outlook are published twice yearly, at Budget and at Autumn Statement. They look at the future performance of the UK economy, in this case for the period to 2018-19.
The OBR provides an updated statement on the current state of the public finances and whether the government is going to meet its own fiscal objectives. The main objective, set by the government, requires it to balance its budget at the end of a rolling five-year period. A balanced budget means the amount spent by the government in a year, on things such as the NHS and welfare is equal to the amount brought in by things like taxes.
The Autumn Statement gives
In reality it has become something of a second Budget. It also gives the Chancellor the chance to stand up and talk about the economy and guarantee plenty of media coverage. Though this can be a blessing or a curse. Remember the pasty tax?
If you’re a real enthusiast, you can follow the Treasury’s Twitter for latest information, using #AS2014.
Or we’ll post the important bits on the BristolPost.co.uk throughout the day, next Wednesday, December 3.

Greater Bristol
Devolution for the regions has gathered momentum following the Scottish Referendum this autumn.
The Coalition has already moved towards local authorities having greater control of how business rates are spent but it could be that the Chancellor goes further in the Autumn Statement.
The Government wants regional powerhouses with their own agenda and responsibility to deliver economic growth in their respective area.
It is looking for incentives to encourage areas including Bristol to take this path. The process is likely too complex to push through this side of the general election, but this could include steps towards local tax raising powers for those who grasp the regional mantle.


Autumn Statement 2014: Business wants some early Christmas presents

Dear Mr Osborne
We’ve been very good this year, helping our economy to grow. So for Christmas this year, business would like...
f Wholesale reform of business rates to make them simpler and fairer, from, the Bristol Post, Business West, CBI and pretty much everyone else
f More spending on infrastructure such as roads and rail, from Phil Smith of Business West and John Cridland of the CBI
f Scrap auto-enrolment pensions, Matthew Lea of Bishop Fleming
f A single and dedicated HMRC contact for each mid-sized business, Allister Weir, of Grant Thornton
f Tax cuts to give incentives to hire and train young people, Phil Smith, Business West
f Export tax breaks, Chas Roy-Chowdhury of the Association of Chartered Certified Accountants



 

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