27 November 2015

In what many were expecting to be a tricky time for the Chancellor, as he delivered his statement on the Spending Review to MPs, Mr Osborne managed to dodge a few traps, shoot a few Labour foxes and produce a few surprises.

A few hours after the event, various business organisations and others had had time to look at his performance in more detail and, unsurprisingly, not everyone was impressed.

As forecast in advance, one of the main problems was the Apprenticeship Levy with the CBI describing it as the sting in the tail of an otherwise good spending review for longer-term investment in the economy.

Director-General Carolyn Fairbairn said that, at 0.5%, the levy is a significant extra payroll tax on business which will now catch more smaller firms. The description of it as a payroll tax was echoed by the Institute of Directors (IoD) and also by John Longworth, Director General at the British Chambers of Commerce (BCC).

He went on to welcome the plans to extend the small business rate relief scheme, to protect adult skills funding for FE Colleges and for more investment in health and energy research.

For the IoD, Allie Renison, Head of EU and Trade Policy, noted the disparity between the Government's extremely ambitious exports target and its continued chipping away at the budget of UK Trade and Investment (UKTI).

On business rates, the CBI welcomed the decision to extend the small business rate relief scheme for another year but was disappointed to see the promised response to the Structural Review of Business Rates pushed back to the 2016 Budget.

More applause for the Chancellor came from Gareth Stace, Director of UK Steel, on the exemption of energy-intensive industries from the costs of renewables.

He said: "Moving to an exemption of energy-intensive sectors from the costs of renewables is enormously welcome and demonstrates that Government is dedicated to finding a long-term solution to this problem."