While business groups generally welcomed the Chancellor’s Autumn Statement, the TUC warned that more public sector cuts threaten further economic decline or — in the words of TUC General Secretary Frances O’Grady — “Groundhog Day all over again”.
The Director-General of the Confederation of British Industry (CBI), John Cridland, described the changes to business rates and stamp duty as "a shot in the arm for families and growing firms".
Blaming business rates for sapping the strength of good companies "long before they make a single penny in profits", British Chambers of Commerce (BCC) Director General John Longworth said that businesses would be pleased that the system is to be reviewed.
For the Federation of Small Businesses (FSB), John Allan welcomed the package of renewed reliefs, saying they "will help bridge the gap until fundamental reform can deliver the change everyone agrees must now come".
Both the CBI and the Institute of Directors (IoD) welcomed the announcements of further support for SME lending through the British Business Bank and the Funding for Lending scheme, while the IoD’s Malcolm Small described the decision to consult on removing regulatory barriers to crowd funding and peer-to-peer lending as very positive.
The FSB’s John Allan called for better targeting of small business loans in order to focus banks on meeting the needs of firms looking to hire staff, export, and grow their businesses.
Education and training
The BCC said that abolishing employer’s National Insurance contributions (NICs) for young apprentices will encourage many businesses to hire them, by reducing the costs of employment and additional training.
The CBI welcomed the move on NICs, but warned that the incentive must not be "eaten up by costs and red tape". To help companies which keep young people on beyond their apprenticeship, Mr Cridland proposed that the transition to paying full NICs should be tapered.
Noting that small businesses have been responsible for creating the majority of jobs in recent years, the FSB's Mr Allan said that NIC relief "will encourage businesses to take on even more young people and tackle the UK's skills gap head on".
The logistics industry is suffering a chronic shortage of drivers, noted Karen Dee of the Freight Transport Association (FTA) as she called on the Government to work with the industry to encourage skills development within the sector and to identify innovative ways of increasing vocational training.
For the IoD, Allie Renison welcomed the expansion of UK Trade and Investment's (UKTI's) regional International Trade Advisers network. "Local insight visits for SMEs are vitally important, given that smaller businesses often do not have the time or resources to devote to exploring new markets", she said.
Claiming that nearly 50% of IoD members have used social media and online networking to identify business opportunities abroad, Ms Renison described the Government’s emphasis on digitising export support as crucial.
The view of the BCC — expressed by Director General John Longworth — was that, while more still needs to be done, the support announced for exporters will boost business confidence and help more companies break into new and emerging markets.
Although disappointed that fuel duties have not been cut, the FTA congratulated Chancellor George Osborne on resisting the temptation to raise some additional revenue at the expense of the freight industry and other road users. The fuel duty freeze was also welcomed by the FSB.
With rural businesses and those in the North of England disproportionately reliant on the road network, the promise of £15 billion of investment was welcomed by the FSB, while the CBI described the roads investment strategy as a significant step towards much-needed upgrades to the road network.
Research and development
In the view of the CBI, the "modest improvement" to the R&D tax credit and funding for research programmes are welcome, but are not the step change that businesses need. Both public and private investment in R&D need to increase dramatically if the UK is to compete on a global level, the CBI argues.
The IoD was more positive, with Jimmy McLoughlin, Head of Technology Policy, saying that the Chancellor’s announcements should help to ensure that the "Golden Age of technology" continues. The extension of R&D tax credits could be particularly significant he noted, as they lead to innovation and job creation throughout the UK.
However, FSB Chairman John Allan said that business take-up of R&D tax credits remains low, with just 1 in 50 of the Federation’s members claiming them.
For the IoD, Head of Taxation Stephen Herring expressed concern that much needed foreign direct investment (FDI) into the UK will be threatened by uncertainty over how the detailed provisions of the Diverted Profits Tax (or Google Tax as it has immediately been christened) will be applied.
The CBI also expressed reservations about the UK’s decision to go it alone on international tax, with John Cridland saying the initiative will be a concern for global businesses.
From Eric Davies, business writer for Croner