The Chancellor, George Osborne, has delivered his Autumn Statement to the House and the experts are now delving deep into the pages to find out what he omitted to tell us (as Chancellors always do).
In the meantime some have already made comment and some of these are below:
The Labour Party do of course get right of first reply via Ed Balls as shadow chancellor at the despatch box. He accused George Osborne of ‘breathtaking complacency’ and that he was in ‘complete denial’ about a cost of living crisis that faced families in the UK economy today that would lead to people being poorer in 2015 than they were in 2010. He did however have to shout his comments above the excited noise coming from the government benches.
UKIP says that the Chancellor ‘has got his priorities wrong’ saying that despite promises to get the deficit under control he will still borrow more than he said he would. UKIP also points to the pensions ‘triple lock’ and future energy prices as problems that need addressing as well as the scrapping of ‘vanity projects’ such as HS2.
From business and other commentators:
Manos Schizas, ACCA Senior Economic Analyst commented:
“Unlike previous Budgets and Autumn Statements or PBR’s this Statement is aimed squarely at high street businesses with plans for slow, steady or no growth. There’s an irony in how talk of ‘rebalancing’ the UK economy has disappeared now. Growth is now once again meant to be fuelled by consumption, retail spending, and housing rather than by investment.”
John Cridland, CBI Director-General, said:
“We have always advocated the dual approach of tackling the deficit and driving growth – the OBR forecasts confirm it is working. Let’s stick with what works.
“The pressure on the high street has been recognised; the 2% cap on business rates and discount for very small businesses are positive, as is the reoccupation relief.
“Abolishing a jobs tax on employing young people under 21 will make a real difference and help tackle the scourge of youth unemployment.
“But it was a missed opportunity not to support our hard-pressed energy intensive businesses which are also struggling with rising costs, and the package on housing supply could have been more ambitious.
“As we enter the festive season, positive news on growth is clearly welcome but much remains to be done if the benefits of economic recovery are to reach every home in every corner of the UK.”
Friends of the Earth’s Executive Director Andy Atkins said;
“Yet again the long-term health of our economy has been completely undermined by the Chancellor’s short-sighted determination to keep the nation hooked on dirty and increasing costly fossil fuels.
“Handing tax-breaks to climate-wrecking fracking firms simply highlights the fact that George Osborne hasn’t done his homework: they won’t lower bills, MPs say they are unjustified – and they could be illegal.
“The quickest and most cost-effective way to tackle rising energy bills, and end the scandal of thousands of people dying in heat-leaking homes, is to invest in a comprehensive insulation programme. But the Government has caved in to Big Six pressure and given energy efficiency the cold shoulder.
“Building a strong economy and protecting the environment are two sides of the same coin, but yet again the Government has left them both short-changed.”
Peter Spencer, Economic Advisor to EY ITEM Club, comments:
“As expected, the bounce-back in the economy is bringing borrowing down faster than was thought likely at the time of the Budget. Borrowing is likely to be £9 billion lower this year, with similar reductions pencilled in for the future. However the OBR is stressing that this is a cyclical rather than an underlying improvement, signalling that this is not an opportunity for a fiscal relaxation.
Houses of Parliament – FreeFoto.com
“The Chancellor concurs and has set out a plan that is fiscally neutral over the longer term. His measures reduce borrowing by about £2billion in the near term, but then give some of this back over the next three years. But it is basically a recipe for four more years of austerity. The fiscal measures were flagged up well in advance. It was interesting that the Chancellor failed to mention energy policy in his speech. The re-occupation relief for the high street was a new initiative but it remains to be seen who the new occupants will be.
“As the Chancellors noted, the OBR’s near term forecasts are a great improvement on the Budget projections. Longer term, the OBRs growth forecasts are more cautious. Yet their longer term revenue projections are better, revealing a more optimistic view of the HMRCs ability to raise revenue. This reflects the Chancellors old friend fiscal drag as well as his tax evasion and avoidance measures, which continue the campaign of previous statements.”
Jonathan Rees, UK Managing Director, at Western Union Business Solutions commented:
“The Chancellor’s Autumn Statement contains some important measures to boost British businesses; doubling support to exporters and injecting another £250m into the British Business Bank is the perfect medicine for small and medium-sized firms that are still struggling to access the finance they need.
“Our research shows that just one in four (26%) SMEs think that the new Business Bank will help their ability to access credit. While the additional funding is very welcome, the Government needs to give clarity to the options that are available to SMEs. Many still do not know where or in what form this extra support will be made available.”
Chris Masley, pension expert at Duncan Lawrie Private Bank, said:
“The Government wants to help ensure a fair deal for everyone, but a generation of young workers will no doubt be asking themselves how this is a fair deal for them. They will have to work longer and harder for a state pension that is still falling in real terms.
“Many will have already given up hope of not having enough money for retirement. Indeed, our research shows that while most people (67 per cent) would ideally like to retire before they reach 60, over a quarter of people (27 per cent) believe that realistically, they will not be able to retire until 70 or over.
“We should be encouraging young people to start thinking about their retirement plans early, but instead, as the age of state retirement drifts further away, people are increasingly choosing to not review their pension strategy until much later in life.
“If people do not expect to retire until their seventies, then it becomes all too easy to not make retirement planning a priority. In fact, the better mind set would be to start planning for retirement earlier, continue a strong commitment to it and maybe then people could aspire to finishing work at an appropriate age, or maybe even early.”
London Central Portfolio Limited said:
“The implementation of CGT on foreign investors has been an elephant in the room for quite a while. It represents an easy hit and will have popular appeal amongst the electorate who seem to have been revved up by our politicians to be both anti-wealth and anti-foreigner.
“The exemption of CGT for foreign owners has unarguably represented an inequality with domestic buyers. The flip side of this exemption, however, is that it is a tax incentive, which attracts foreign investors into the UK and represents a competitive edge over other global capitals.
“It appears the Government cannot agree on the value which they set on foreign investment. On the one hand they push to make London the international capital of the world, but on the other they consider strategies which will turn foreign investors away and make it a less attractive place to do business in.
“CGT, which is a tax on profit, is unlikely to be a deterrent to investment on its own. However, the cumulative effect of successive taxes introduced in 2011, 2012 and 2013, with regular increases in Stamp Duty and an annual tax on corporate owners, could start to dampen international interest.
“The announcement that CGT will not be implemented until April 2015 means the Government have given themselves breathing space. However, the lack of clarify on how values will be rebased will likely cause uncertainty in the market.
“If the Government intend to rebase property values from 2015, then LCP predict that CGT will have no dramatic effect on the property market. However, should values not be rebased, this may orchestrate a flood of non-resident owned properties to come to market, as they take their profit before being taxed on it.
“There is a positive flip-side, however. For London especially, where around 70% of properties are foreign owned, this could represent a buying opportunity not witnessed since the house price crash of the credit crunch. As property sales flood the market, prices will undoubtedly fall slightly due to increased stock. Once this tax is psychologically absorbed, these buyers will benefit from the price cuts and future price appreciation as patterns return to normal.
“Finally, there is one further point which needs clarity from the Government. It was stated by Osborne that the tax will be brought in on non-residents, but not non-residents and non-domiciles. This indicates the tax is aimed at British Expatriates. No other British citizens pay CGT on their main residence, as it is only applicable to second homes, this heavily questions the fairness of the tax.”
Paul Aitken, CEO and founder of borro commented:
“This morning we saw the Chancellor announce some positive implementations which hopefully lessen the continued struggle for SMEs. Business rate increases are set to be capped by 2% and there will be a continued focus on Funding for Lending however is this going to be enough? We are yet to see any evidence of significant lending to SMEs as highlighted by Ed Balls in his opposition statement. Net ending falling by £100bn to businesses in two years speaks for itself.
“Sadly, our recent research has shown one in five small businesses have been unable to pursue new business opportunities because of lack of funding over the past year, despite various government initiatives being implemented and in addition we discovered today that Boosting small businesses across the country is crucial; they have suffered tightened credit conditions for too long. And while the Bank of England stated that gross lending to SMEs in the three months to October was £1.5bn higher than the same period last year, repayments have risen which has resulted in negative net lending. Sad to say, but SMEs remain locked in a cruel capital battle.
“However, we do applaud the Bank of England for its choice to curtail Funding for Lending for households, and solely concentrating on businesses. Hopefully this signifies change is afoot and we will see these promises come into fruition. It is a bleak outlook otherwise, and what promises to be a not-so festive season should business owners and entrepreneurs be left fighting for support again.”
Toby Lanyon, Chief Operating Officer of TradeRiver Finance, said:
“Today’s Autumn Statement, whilst obviously very broad had good news for both business generally and the alternative finance sector in particular.
“TradeRiver is engaged at policy level with both the Government and related think-tanks. We welcome the positive moves announced today regarding tax treatment of alternative finance provision through peer-to-peer lending, the encouragement for the engagement of new employees and the increase in support for SME lending.
“Healthy, growing SMEs are vital if we are to capitalise as a nation on the current nascent improvement in the economy. We continue to be engaged at the highest level to promote across the board support for SME finance through alternative platforms. We look forward to this sector growing substantially in the future.”
Jason Chapman, Managing Director at Willis Owen, commented:
“George Osborne announced a consultation into allowing Child Trust Fund holdings into Junior ISAs in the Budget in March, yet we’ve still not heard any more on this. Families have told us that the current arrangements are complex and unhelpful, and the longer this goes on without being resolved, the more parents and children are being unfairly penalised.
“We want the Chancellor to clarify whether money held in Child Trust Funds can be transferred into Junior ISAs as soon as possible, to end the uncertainty and let parents get on with saving for their children’s future.”
Commerzbank said:
“The UK Autumn Statement released today provided a useful overview of the state of the economy and the outlook for public finances. As expected, the OBR has raised its near-term projections for growth and looks for a lower public deficit profile than in its March projections. It is also notable that the OBR projects that the UK will run a public sector surplus by 2018-19. But as Mr Osborne pointed out in his speech to parliament, this will only be achieved if growth holds up and fiscal discipline is maintained.
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Sasha Nugent, Caxton FX currency analyst, said:
“Chancellor Osborne’s comments were mostly as expected, highlighting the achievements the government has made in bringing down the budget deficit whilst supporting UK growth. The Autumn Statement was fairly neutral and this was reflected in the lack of movement in the pound. The cancellation of fuel duty increases and tax hikes to help households was a key step is addressing the living standards issue, but many will argue that stronger growth will mean little if the British people are not feeling the effects of this.”
Phill Jones, Commercial Director of Motors.co.uk commented:
“The government’s budget report has once again failed to meet the needs of Britain’s motorists, having presented a list of pseudo cuts and conveniently ignoring the issues British households really want to see resolved.
“Yes, the cancellation of the proposed fuel duty tax is a relief as petrol prices won’t soar any higher, but scrapping the tax doesn’t account for the lack of reduction in petrol prices, which is the more immediate issue and the one needed to stimulate the economy. The proposal of new road development is also promising in essence, but it once again side-tracks the far greater issue of renovating existing roads that are damaged within in the UK, something that is more financially concerning to British motorists.
“On reflection, George Osborne’s plans have been wrapped in some ‘good news’ packaging. Unfortunately, the gift inside is bitter sweet, creating another financially strenuous year for UK motorists, reducing the necessity for new jobs and stunting the progression of Britain’s car manufacturing industry, which is vital to evolution of economic and social mobility within the UK.”