Chancellor announces 110 measures to grow the economy and boost business investment
Tax breaks, planning reforms and investment in growth sectors were amongst the 110 growth measures announced by the Chancellor in this year’s Autumn Statement.
The focus on supply-side measures comes amidst gloomy predictions for the economy and the spending power of individuals. The OBR predict that the economy will grow by 0.7% in 2024, less than half of the 1.8% that was forecast in March. And the Resolution Foundation estimate that taxpayers will be £1,900 worse off between the last general election and next year's vote.
Below is a run down of some of the key announcements and what they might mean for local businesses and the Buckinghamshire economy as a whole.
The big tax announcement was the decision to make the temporary measure of ‘full expensing’ (which allows companies who are subject to Corporation Tax to deduct the full cost of investing in machinery and equipment from their tax bill) permanent. This will have greatest impact within the construction, manufacturing and engineering sectors, and has been broadly welcomed by business groups.
On the planning front, measures were announced which aim to speed up major infrastructure and business planning applications, along with access to the electricity grid.
There was also good news for many on the business rate front, with rates frozen for small businesses and some operating within the retail, hospitality and leisure industries. However, experts generally view this as a ‘sticking plaster’ and believe a major overall of the business rates system is still needed.
For high growth and innovative firms, there was the promise of additional funds being made available via the British Business Bank, the Made Smarter Adoption programme, pension reforms and reforms to R&D tax relief.
The biggest single investment into the county’s economy announced within the Autumn Statement was £5.9m for space research and infrastructure development at the Westcott Enterprise Zone. The investment is a result of a collaborative bid led by URA Thrusters. Further details can be found here.
In addition, referred to within the Autumn Statement, but announced last week, funding has been secured for 5G innovation for Buckinghamshire and the surrounding areas, further details of which can be found here.
Announcements that could accelerate the growth of Buckinghamshire’s key strategic growth sectors and clusters include:
- Plans for further investment in the space sector, including funding for fostering innovation in satellite communications.
- Funding for firms involved with zero emission vehicles, their batteries and supply chains, of which there is a cluster of activity at Silverstone.
- The extension of tax relief within the film and high end TV industry, which should benefit the creative cluster in the south of the county.
People and skills
There were a number of labour market related announcements within the Autumn Statement, the most significant for businesses and economic growth probably being the decision to raise the National Minimum Wage to £11.44 per hour from April 2024. This will disproportionately benefit women and young people who are most likely to work in minimum wage roles. It will however cause a headache for some small businesses with narrow margins.
On the skills front, the government is committing £50m to increase the take up of Apprenticeships in high value sectors, including engineering, an area identified as a priority in the Buckinghamshire Local Skills Improvement Plan.
Whilst measures announced to help people with health-related barriers back into work could increase the supply of workers within the local economy.
Overall, the announcements have been broadly welcomed by national business bodies, including the British Chamber of Commerce, CBI and FSB. However, the economic outlook is a reminder of difficulties the country faces in an era of slow-growth with an ageing and sicker population.
The full Autumn Statement can be read here.