By HAL WILLIAMS
BRITISH Chancellor Jeremy Hunt’s Autumn statement has caused another avalanche of responses in the BV inbox, and there are — unsurprisingly — differing views on its worth.
Hunt has outlined an innovation drive with 110 pro-growth measures. He announced a £320m plan to “unlock investment” from his Mansion House Reforms to pop an extra £1,000 in pension pots and free-up new investment vehicles. These measures will be supported by a growth fund established in the British Business Bank.
There was comfort for renters, with a rise in the Local Housing Allowance rate to average £800 next year — and a £450m allocation to the local authority housing fund.
Andrew Drylie, investment manager for Quadri Ventures, said the Chancellor’s Mansion House plan was “a positive step” for early-stage start-ups. “However, if the UK is going to deliver on its lofty Silicon Valley aims, capital alone is not enough to get them off the ground.
“We need to invest in the infrastructure and people that can allow early-stage businesses to grow.”
Lisa Watson, director of sales at Close Brothers Motor Finance, said car dealers would benefit from the extension of business-rate relief. But, she added, the decision not to cut business rates would be a significant blow.
“(A majority) of dealers listed rising costs as their primary concern,” she said, “and many were looking to the government for support.”
Elliot Vure, corporate sales director at property lender Together, said Hunt’s focus on the politics over the economics “wasn’t quite the full meal the UK public have been hungry for”.
“A promise to shake-up the red tape around planning applications is a smart move,” he said, “as opportunity for the nation’s developers must be unlocked.” The time-drain on finance, labour, and getting plans approved was “the Achilles heel” of the industry.
Patrick Thomson, head of research and policy at Phoenix Insights, said pensioners would welcome news the triple lock would be retained without adjustments. “The triple lock has been an important policy to ensure retirees’ income has kept pace with rising prices or increases in the working population’s wages,” he said.
Mike Randall, CEO of Simply Asset Finance, said the increase in National Living Wage would be well received, “particularly in the current inflationary environment”.
“However, we should not forget that for small businesses it’ll be yet another increase to overheads and present a tough balance for achieving growth alongside an increased payroll.
“Support to address this increase needs to be top of the agenda for the government when thinking about the recovery of the UK economy. It’s imperative SMEs receive the right advice, support, and initiatives to enable long-term planning, and access to the right financing solutions.”
Will Fraser-Allen, chair of the Venture Capital Trust Association, expressed “delight” at confirmation that the sunset clause applied to Venture Capital Trusts (VCTs) would be extended to 2035. “The Chancellor’s commitment today is the right decision for the UK economy,” he said.
“By removing this (sunset clause) uncertainty, we can now support the cross-party consensus that has now emerged, which recognises that early-stage companies are the engine of growth across the UK: that small firms generate employment opportunities and drive innovation.”
Rachel Winter, partner at Killik & Co said the “so-called ‘UK productivity puzzle’ refers to the lack of growth in the output of UK workers” since the financial crisis.
“Economists have not agreed on a cause,” she said, “but AI has been touted as a possible solution. Better use of automation and AI should allow UK workers to produce more.”
Neil Rudge, MD of Enterprise at Shawbrook, said that while “an improving set of macros” had given greater confidence to SMEs, many businesses would have held off making investments. “As rate rises appear to have reached their peak and inflation continues its retreat,” he said, “the Chancellor has been given some breathing space to give businesses more comfort to unleash capital and commit to more substantial investment projects.”