Autumn Statement: A roundup of reactions from Yorkshire businesses

Following Chancellor Philip Hammond’s Autumn Statement delivery, pledging to provide an “economy for everyone”, Bdaily caught up with business leaders from across Yorkshire to get their immediate reactions.

If you missed the budget announcement or want to see the key points, click here for Bdaily’s Autumn Statement Summary.

Tim West, head of tax in Yorkshire and Humberside at EY

“In what was really a mini-budget, with the 43 measures including 18 tax changes, the Chancellor ranged across tax system, giving a little bit here and taking a little bit there.

The freeze in fuel duty was predominantly funded by the two percentage point increase in the Insurance Premium Tax. Some helpful additional funds will come from aligning the employer and employee rates of National Insurance contributions.

The Chancellor has avoided a car crash, by exempting low emission vehicles from the £235m attack on salary sacrifice, but keeping many other benefits within his targets.

He also increased the VAT flat rate scheme, providing another £195m next year, and confirmed the implementation of the off-payroll working rules in the public sector.

All in all, this was an Autumn Statement that felt pretty familiar and similar to those of his predecessors. The Chancellor even confirmed that he would stick with the Business Tax Roadmap of the last Budget.

This may be of limited benefit since it was more of a travel journal than a roadmap, and was short on vision for the future.

Many businesses will be thankful for the lack of new measures but will now be waiting for legislation day on 5 December to see the detail of the items omitted from today’s speech.

As for the statement itself, we will now see a return to the November Budgets we remember from the time of Ken Clarke, taking us back 20 years. In the future, the Chancellor will be able to play Father Christmas rather than the Easter Bunny.“

Steve Harris, regional director for Mid Markets at Lloyds Bank in Yorkshire

Recent political and economic events mean that firms across Yorkshire will have been watching today’s Autumn Statement with great interest, and many will have welcomed the announcements made by the Chancellor.

A recent survey we conducted found that more than half of Yorkshire’s firms wanted the Chancellor to prioritise cutting Corporation Tax. Paying 3 per cent less tax could unlock a significant amount of capital for businesses to invest in achieving their growth ambitions.

The pledge to improve digital infrastructure will also be well received, as almost a third of Yorkshire firms told us they feel held back by slow connectivity.

Investment in roads and transport, including HS2, will help keep the counties firms connected with its customers across the UK. It will also create a range of new supply chain and expansion opportunities for firms across the region.

At Lloyds Bank, we are committed to helping firms capitalise on investment opportunities, and since 2011 we have increased our net lending to SMEs by 29 per cent.“

Richard Wright, Executive Director of Sheffield Chamber of Commerce

“There aren’t too many surprises in the statement and in fairness to the Chancellor he must feel he is working within a straight jacket.

We are seeing the long-term effects of insufficient investment in wealth creation, particularly in the North of England. It is easy to blame the Brexit effect but I think it goes much deeper than that.

Exports are particularly worrying. The Chancellor identified that exports have fallen as a proportion of GDP for years despite massive investments by the Government in trade support through BIS, UKTI and now DIT – but it’s no good changing the name.

The way that support is given needs completely overhauling to support that reflects the commercial environment in which trade is carried out - less process and more results driven.

Interestingly, and in the long term, Brexit may actually allow us more flexibility here as we refine our trading methodology with other parts of the world. The 21st century is likely to be the Asian century, as focus continues to move from Europe and the West.

That apart, we are pleased with the extra money for research and development, infrastructure and air passenger duty.

We need to see much more around how we are going to deliver the 2% productivity target. This region needs more than that because we are behind the national average and it’s one of our greatest challenges.

As always in these events the devil is in the detail which we’ll only get over the next few days so we need to keep our eyes on that.“

Adrian Kemp, director at professional services and engineering consultancy, WSP | Parsons Brinckerhoff in Leeds

“I was pleased to hear the Chancellors re-affirmation of the status of the Northern Powerhouse and I believe that the committed infrastructure investment in the regions and the claim that devolution will be at ‘the heart of the Government’ is a positive step towards Transport for the North becoming the UK’s first sub-national transport body.

The financial commitment to infrastructure is there, but to ensure they are taken forward we must see Northern cities being given more powers to make decisions and that investment organisations are given the green light to deliver devolution and see infrastructure projects of all sizes, through to completion.

With the current economic uncertainty, we welcome this ambitious plan to invest in the UK’s infrastructure, which will provide the stability to increase market confidence and enhance the competitiveness of the North and the UK as an investable proposition.“

Richard Little, Tax Partner at KPMG in Yorkshire

“There were a number of micro-measures introduced for businesses, particularly some good mood music around supporting the SME community. Softening the impact of the rates regime, providing rate relief for rural small businesses and freezing increases in fuel duty will be welcome.

Saving businesses £6.7 billion over the next 5 years in the overall package of business rate reform is not a small number. And, announcements of billions of pounds being spent in infrastructure and housing programmes will not just be positive in terms of helping to improve productivity, but could prove to be extra welcome for the region’s firms in the construction supply chain.

The Chancellor is obviously focussed on making the UK a more competitive and certain tax environment for SME businesses, not just through re-confirming the business tax roadmap heading towards the lowest corporation tax rate in the G7 industrialised nations, but also signalling the intent to improve the R&D tax credit regime – but as they currently need EU approval to make improvements to the regime this will possibly happen post Brexit.

Doubling the Export Finance regime to £5 billion of support, together with broadening the currencies covered by this support, will encourage more businesses in Yorkshire to think about how they can tap into international markets. Whilst SMEs have become far more adept at selling into overseas markets, there remains a huge amount of untapped potential in the number that aren’t currently involved in exporting.

It is disappointing however that the Chancellor failed to address the skills shortage with no new announcements on training or apprenticeships, which will do little to help business owners with their growth agendas and war for talent.

And, despite the Chancellor making a great deal of noise today on behalf of the SME community, the announcement of a consultation of a review of the way people work will cause concern for large swathes of these businesses as many have just one employee, so the outcome of the consultation could have massive tax implications for small business owners in the future.

Also, in pressing ahead with the removal of tax advantages for salary sacrifice, aside from pensions, childcare, Cycle-To-Work and following representations from KPMG, amongst others, ultra-low emission vehicles from April 2017, many employees in Yorkshire will see a rise in their tax bills.

More broadly, the signals of commitment to achieving a Northern Powerhouse are very much to be welcomed. Productivity in the North must rise and it is sensible to address this as a key part of the national productivity push.“

Simon Gray, a partner at accountancy and advisory firm Hentons

“Businesses of all sizes are faced with opportunities and threats in equal measure. The Autumn statement took a big step to giving companies a much-needed boost in confidence.

A cut in corporation tax is welcome, and we’d like to see it go further to become the lowest in the G20. A low tax base boosts domestic business and attracts inward investment.

Hentons has worked extensively with R&D tax credits. The tax break has proven very effective in incentivising companies to invest and create jobs.

Once Article 50 is invoked and we are out of the EU, we will no longer need to adhere to the ‘State Aid’ provisions that effectively cap our level of R&D incentives. Now is the time to help business become more innovative and productive.“

Chris Chidley, chief executive of Bradford-based recruitment group Specialist People Services

“Mr Hammond’s maiden Autumn Statement was a clear statement of intent when it comes to investing in infrastructure.

With £1.1bn to be invested in our local transport networks, £200m to be invested in traffic pinch points and the continued upgrading of our rail network, this is an attempt to keep Britain moving – and one very much welcomed by the industry.

It will also help to counter-balance any potential softening of the economy, should we see a dip post-Brexit, so it’s vital it remains on the agenda.

I would have welcomed more clarity around immigration and the future of freedom of movement across the EU.

The availability of skilled workers – home-grown and from overseas – will be crucial to the successful delivery of these infrastructure projects, and to the UK economy as a whole.

It’s also important to remember that we feed off our international colleagues, learning from their own experiences of implementing similar infrastructure projects abroad and it’s imperative that the government doesn’t turn its back on this opportunity.“

Zahid Khan, owner of TaxAssist Accountants in Wakefield

“Small business was left completely out in the cold in the Chancellor’s statement. Hard working small business owners were given absolutely no recognition of the major contribution they make to the UK economy.

Small businesses are already facing huge challenges from compulsory contributions to staff pension pots, the National Living Wage, changes to the way dividends are taxed and onerous business rates and there was no respite from the Chancellor. In fact the further increase in the National Living Wage announced today - from £7.20 to £7.50 an hour from April - could deter recruitment decisions and slow down growth.

The £2.3 billion housing infrastructure fund and further £1.4 billion for affordable homes is a welcome contribution to local economies, with many small businesses such as plumbers, electricians and decorators as well as those in construction reaping benefits.

Cancelling the planned rise in fuel duty will help some local business owners. For many, particularly those which deliver products and services to our homes, cars and vans are essential not a luxury.

But we would have liked to see more concrete measures to encourage small business growth, such as an increase in Employment Allowance, or the return of the Small Companies’ rate for corporation tax.

The Chancellor said that next year’s Spring Budget will be the last - replaced by an annual Autumn Budget. He must use the opportunity to give some well-deserved reward to the over five million small businesses in the U.K who contribute a massive £1.8 trillion to our economy and create some 15.6 million jobs. Small businesses are the backbone of local economies - supporting them will be essential to meeting the Government’s objectives.“

Johnny Caddick, managing director of Harrogate-based Moda Living

“Delivering the infrastructure necessary to support new homes will be crucial to boosting supply, so while the promised £1.3bn for shovel-ready projects like road improvements will help boost productivity and create jobs in the short-term, they are unlikely to have the transformative effect on residential development Crossrail has had.

To create the Northern Powerhouse or Midlands Engine, agglomeration to help achieve scale is critical, and that means investing in cross-country and inter-city transport beyond HS2.

Theresa May has made rebalancing the economy away from London a top priority, and that requires for genuine counter-weights to the capital to emerge, so we need to see more projects like HS3 for the North.“

Michael Redmond, managing director of York-based Redmove

“A ban on lettings agent fees is a potentially crippling measure for the lettings industry and as an independent local agency we do not welcome this move in any way.

The lettings arm of Redmove does not generate a vast income from tenancy fees, it simply covers the cost of a genuine service that we provide to help protect tenants and find them a rental property from a reputable landlord.

This covers the charges of all the legal checks involved with an application, our time to help tenants undertake viewings, as well as all the costs involved such as fuel, running offices and being at the end of a phone.

Our fees are not expensive and are actually lower than the national average but without charging these necessary costs, we would struggle to deliver the service we do. Many smaller agencies might fold.

The removal of this cost just feels so restrictive and at the end of the day, they will need to be covered somehow as lettings agents, just like any business, are not voluntary organisations.

You don’t see rail companies being asked to provide free train journeys as their costs increase.

Already overstretched landlords are not going to want to absorb this cost and if they are forced to, they will likely relay it back to the tenant by increasing rent. So, ultimately by introducing this measure, ironically it will be then tenant who ends up paying.“

Mark Mitchell, managing director of Yorkshire housebuilder Avant Homes

“We are encouraged by the Chancellor’s announcement to invest almost £3bn into a homebuilders’ fund, which will aid in the very real need to deliver more housing in the areas where it is desperately needed.

We are seeing a huge demand for quality new homes throughout Yorkshire, but there are also long-term challenges when it comes to the supply of land for development, so the Chancellor’s pledge to focus infrastructure investment on unlocking land is most welcome.

This investment, along with the extension of the Help to Buy equity scheme and Help to Buy ISA, will allow housebuilders to continue to deliver much needed homes and support homeownership, particularly for first time buyers.“

Phil Sugden, operations and projects director of Leeds-based Managed Office Solution

“While we certainly welcome the Chancellor’s commitment of £1.8bn for the English regions from local growth funds, we believe that there is much more to be done to fix the ‘gap between our capital and other cities’, as Mr Hammond acknowledged today.

Providing the infrastructure needed to attract businesses and support new homes and across regions is critical as is fostering growth through the creation of enterprise zones in Yorkshire.

Therefore, we hope to see decisive leadership and fast action to implement the new productivity investment fund of £23bn to be spent on infrastructure and innovation over the next five years.

Likewise, we agree with the Chancellor’s belief that the performance of regional cities must improve and that it requires stability, especially amid the uncertainty following the Brexit referendum.

Projects such as road improvements will help boost productivity and create jobs in the short-term, but we must continue to hand real power to the regions if we are to see long-term posterity.“

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