Philip Hammond’s first, and coincidently last, Autumn Statement was a responsible package that will reassure local businesses in Herefordshire & Worcestershire.
A gloomy opening saw growth predictions cut following the Brexit vote, as the OBR’s revised forecasts paint a more pessimistic picture of the UK economy. However, measures announced in the statement to boost infrastructure and productivity will help support business confidence.
This was a statement dedicated to recognising the importance of infrastructure in creating a global Britain, highly competitive and ready to seek opportunities following Brexit. The Chamber welcomes the news of the National Productivity Investment Fund (NPIF) which will provide £23bn of additional spending to ensure that the UK economy is fit for the future, in areas such as; transport, digital communications, R&D and housing. By increasing resources for local, regional and national infrastructure, the Chancellor will help boost local business confidence. It is critical, however, that these upgrades begin without delay.
We’re also pleased to hear the Chancellor commit a further £1bn worth of investment into full-fibre broadband and trialling 5G, with the ambition of Britain being a leader in 5G connectivity. Locally, however, we are plagued with broadband ‘not-spots’ and many businesses do not get the connections they deserve or need. Connectivity is a big problem in the two counties and will be a key part of our Business Manifesto for 2017.
Despite positive steps with infrastructure investment, businesses will be disappointed to see a 2% rise in Insurance Premium Tax (IPT), from 10% - 12%. This makes a critical safety net for businesses much more expensive, as insurers pass down their costs. Generally, the business community is much more interested in up-front taxes and costs (such as IPT, Apprenticeship Levy and Business Rates) which hinder them investing and taking risks, rather than changes to corporation tax which tend to mostly benefit multi-nationals.
The Chamber is delighted, however, to see the fuel duty rise cancelled for a seventh year in a row, saving the average car driver £130 and van driver £350 per year. This will be extremely helpful for small companies and the self-employed in the two counties, who have already been hit in recent months by rising fuel prices and for whom transport and distribution costs account for a significant proportion of their cost base.
Sophia Haywood, Policy Executive at Herefordshire & Worcestershire Chamber of Commerce, said:
“It is right that the Government should focus on developing first class infrastructure, locally and nationally, and investing in productivity to ensure success during the uncertain times ahead. However, I am concerned about the lack of emphasis on exporting and recruitment, issues which are at the forefront of businesses minds. In particular, the sole announcement for additional export finance isn’t sufficient to reach exporting targets or to help businesses take the first step into the international arena.”
Dr Adam Marshall, Director General of the British Chambers of Commerce, said:
“While business communities would have liked Philip Hammond to go even further to support growth, they will recognise that his hands are somewhat tied by lower tax receipts and sharply higher borrowing forecasts. The fact that he chose to commit significant new resources to support growth and productivity demonstrates welcome flexibility during a period of uncertainty and change.”