Chamber Reacts to Autumn Statement

Greater Manchester Chamber of Commerce has given its initial reaction to the Chancellor's Autumn Statement.

In his statement, the Chancellor announced that Salford would be one of a number of cities to receive money for super fast broadband. In addition he confirmed that HS2 would be progressed in the new year for the North West and West Yorkshire. Transport investment was also announced for pinch points in the road network, with other strategic schemes included.

Dr Brian Sloan, Chief Economist at Greater Manchester Chamber of Commerce, said: "As expected the Chancellor was forced to confirm that he will miss his deficit reduction target and that growth will be lower in the coming years than the Office of Budget Responsibility had expected at the last update in March.

"Despite this there were some positive announcements for businesses. The announcements included broadband and transport that are welcome, although once again there is a focus on spending in London and the South East. I was disappointed not to see business rates frozen, but it was good to see there was an extension of Small Business Rate Relief for an additional year from 1 April 2013. There will be a grace period for empty new build properties to be exempt from Business Rates. I'm delighted that the fuel duty increase scheduled for January is to be scrapped, as this was something the Chamber called for in its letter to the Chancellor last month. Having contributed to the Heseltine Review process, the Chamber is also pleased that the Chancellor took this opportunity to implement a number of the recommendations.

"The Annual Investment allowance is to be increased to £250,000 for two years from 1 January 2013. There will also be greater devolution of funding for skills, housing, transport and support for the unemployed to cities; increased funding for Local Enterprise Partnerships; further reduction in Corporation Tax to 21% in 2014 and the creation of a Business Bank with £1bn capital." 

What our members say...

Simon Brownbill, Partner at national accountancy firm, HURST: “There were no radical measures in this statement but some good news for North West SMEs. The Chancellor reiterated the fact he is relying on the private sector to drive a turnaround and it was good to see measures to help them do this.

“The main boost was a tenfold increase in capital allowance relief from 1 January 2013. However, like most businesses, many of our clients have already put their plant and machinery orders in for next year so it’s too late for them to benefit in 2013.

“We welcome the incentives introduced for entrepreneurs and start-up businesses. The increase in investment into the Regional Growth Fund and creation of a £1bn business bank will help create jobs, although we won’t see the results of these measures on the economy until four or five years down the line. 2013 is set to be another tough year for SMEs and it will be a case of survival of the fittest.”

Peter Chambers, Partner in the government and public sector practice of PwC in Manchester, said: "The Autumn Statement had a welcome focus on growth, jobs and attracting business to UK plc. In particular, more money for Local Enterprise Partnerships and devolving funding for housing, transport and skills could also be a step forward for localism.

“The announcements on infrastructure investment are also positive for long term growth and will be a signal to companies here and overseas that UK plc is open for business. However, re-investing current spending in infrastructure is a good step, but there’s still a way to go to deliver good growth.

“Public sector austerity is also here to stay well into the next Parliament. Further spending cuts will require public sector leaders not only to reduce costs but also act on to manage the demands on public services.

“But there is a danger that the public develops an immunity to austerity and the continuing squeeze of public spending ceases to be news, until the consequences start to be really felt. The public needs to be on board around understanding, at a local level, the implications and extent of the changes and understand the options, how and why services are changing. The new normal needs public services being more effective, but essentially doing less with less."

Nick Jones, Director of PwC's Public Sector Research Centre added: "As temperatures drop, all eyes have today turned to the bleak outlook for our public finances, with austerity measures set to continue for some years yet. However, on the growth agenda, one of the bright spots from the Chancellor’s Autumn Statement was his mention of the devolution of growth-related spending and a greater role for Local Enterprise Partnerships (LEPs).

"The acceleration of devolved powers on economic development is important where the costs, benefits and solutions are localised – such as local transport and planning policy.

"Government could also use its second wave of City Deals to increase focus on how to unlock cities’ individual growth challenges. Cities need to take tailored approaches rather than ticking the boxes of the standard menu of priorities for city region development."