Member Article

The Autumn Statement: What to expect for South East SMEs

As the UK population prepare for Chancellor George Osborne’s Autumn Statement, Bdaily has turned to South East SME business leaders to find out their expectations for the statement, as well as their wills and wants for potentially the last six months of Conservative power.

Philippe Gelis, CEO and co-founder of London-based currency exchange company, Kantox, is expecting the government to freeze haul Air Passenger Duty to encourage UK business growth: “It’s really encouraging to see that SMEs - the engines of the economy - are still being prioritised from a policy perspective, with exporting still high on the agenda.

“There has been talk of freezing long-haul Air Passenger Duty as a way to help UK businesses trade with new growth markets. Although this would help tackle the export issue from a physical distribution perspective, it still doesn’t tap into the underlying issues that prevent SMEs from trading on a global stage – paralysing fear of foreign exchange (FX) risk and frustration with banks’ opaque FX services - no doubt heightened after the recent high-profile scandal.

“Although many SMEs might be tempted to view a potential drop in business rates as an early Christmas present, it may be a case of relieving one burden and forcing them into another if they are not made aware of how to manage the risks that come with trading overseas in their quest for growth.”

Thomas Villeneuve, CEO and founder of London-based flatsharing network Weroom feels that the rising cost of house prices is a major issue for Cameron’s government, he said: “With house prices set to increase by £10,000 in the New Year, it’s clear that it is only going to become more difficult for young Brits to make that critical first step onto the property ladder, which means that the demand for people needing to enter flatshares – particularly in cities – is going to grow.

“One thing that we would therefore like to see raised in the Autumn Statement is the introduction of a dedicated renting minister, a policy that 50% of the British public said they want to be put in place in our recent research. Ultimately, this would help to support the flatsharing industry and allow businesses like Weroom to grow their communities by providing greater incentives to renters and landlords to enter flatshare schemes.

“The introduction of a renting minister would open up the potential to offer greater support to property owners and landlords, specifically through rent subsidies and financial support schemes.

“This would help companies like Weroom grow its portfolio of landlords and tenants by making flatsharing an even more accessible, financially benefitting and transparent experience, which in turn would help expand our flatsharing network across the UK. It’s clear that as house prices continue to increase, more people are being forced to enter the property landscape far later in their adult lives than 10 years ago, which means the demand for flatsharing is inevitably going to expand.

“The government needs to acknowledge this and offer greater support young people in this situation, because flatsharing is fast becoming the only option for many young people living in Britain.”

Peter Burgess, managing director at London-based Retail Human Resources, the UK’s largest recruitment company specialising in the retail sector, would like to see a proposal to increase the minimum wage by more than inflation. Burgess said: “The cost of living is likely to play a major role at the upcoming General Election, therefore a proposal to increase the minimum wage by more than inflation would be a sensible move. Let’s not forget that many people on the minimum wage are also on benefits.

“Any increase in the minimum wage would save the Government significant amounts of benefit payments at a time when the Government is desperate to bring the welfare budget, which eats up about one third of all government spending, down.

“All parties want to reduce unemployment and by making work more attractive than being on benefits then it will encourage more people into work.

“In order to boost the employment figures I would also remove National Insurance (NI) from anyone on the minimum wage and I would also work to have no employers’ NI contributions too. For the retail and hospitality industries, who between them employ 20 per cent of the UK workforce most of which at the lower end, this would create many more jobs as wage costs would be reduced.

“This would be paid for by abandoning the many ‘back to work advisory programmes’ which have cost billions of pounds worth of time and investment and have done little to dent the unemployment queues.”

Vince McLoughlin, partner at Sussex-based business & tax advisory firm Russell New, suggests it would be a ridiculous decision to stifle growth by hindering businesses with additional costs, he said: “It would be a ridiculous decision to stifle growth by hindering businesses with additional costs. The small business rate system has previously placed too high a burden on UK businesses and by extending the rate relief again will provides small businesses with some respite along with the space in which to grow and continue the economic recovery.

“With greater relief, SMEs will have an incentive to make crucial investment decisions, some of which may have been delayed waiting for this announcement. Perhaps then will they be able to get mid-sized businesses to unleash their capital which will stimulate further growth and give the economy another push in the right direction.”

Michael Bruce, CEO of Purplebricks.com is expecting the housing market to be a focus for Osborne, he said: “In the forthcoming Autumn Statement it is important that the Chancellor has a solution based approach to the housing market from an economic perspective. It is easy to say that house prices are rising and this could have a significant impact on the economy but what are the answers? Without wishing to sound like a broken record the short to medium term answer for the long term is to reform the planning laws so there can be more affordable houses built quicker and in places where people want to buy them.

“Where there is a continued shortage of housing stock, and London is a prime example, the price is driven up. More housing, more choice and less unnecessary price inflation due to competition for housing can make for a more stable market where everyone wins.

“The Chancellor should offer incentives to builders to build and place conditions on planning consents that require the housing to built within a more constrained time frame but with upside when this is achieved.

“I believe that regions outside of London will see considerable growth in pricing over the next few years because of the stock shortage and this could lead to a more unstable market and as a result an unsteady economy. “

Darren Fell, MD and founder of Brighton-based Crunch Accounting is interested to find out how the government plans to build business confidence amongst SMEs, he said: “We’re hoping the Chancellor will focus more on SMEs in today’s Autumn Statement. We’ve already heard, ahead of the statement, that the Treasury pledge an extra £400 million to extend Enterprise Capital Funds which back SMEs but, as we know, funding is not the only obstacle for small business growth.

“We want to know what the government plan to do to support confidence among business owners and how they intend to address the complex tax laws, such as IR35 and the newly introduced VAT MOSS, that currently cause substantial barriers for micro-businesses and those starting out on their own. “

This was posted in Bdaily's Members' News section by Ellen Forster .