The Chancellor of the Exchequer today announced an autumn statement that contained a number of positive measures for business and the wider economy in Greater Manchester and beyond, with some bold gestures but in some areas we believe he could have gone further. The macro-economic position reported is, on balance, more positive than at the Budget earlier in the year, though many of the public spending cuts yet to come remain some way away in the next parliament, with some ambitious and difficult to achieve volumes of cuts set for 2017 onwards.
The highlight for many individuals will be the raising of the personal allowance which will benefit higher-rate taxpayers for the first time since 2010 and the large-scale reforms to Stamp Duty Land Tax, removing the slab system which has heavily distorted pricing for many years. Alongside some detailed corporation tax reforms to reduce avoidance and measures to restrict the losses that banks can offset against future taxable profits, the measures around business rates, whilst positive, were disappointing in their scope.
We are delighted that the government has committed to a wholesale review of the system to report by 2016, but the Chancellor’s continued insistence that this remains revenue neutral will always restrict what could be achieved without this constraint. Nevertheless, we commit to working closely with government and representing our members’ views vociferously on this important topic.
The Chamber has repeatedly called for reform of Air Passenger Duty, particularly with Northern Ireland having responsibility devolved. It is a direct tax on businesses seeking commercial opportunities overseas and whilst the exemption of under-12s (with under-16s coming later) will be welcomed by families, this will have no impact on the costs of flying abroad for business purposes.
Additional funding for UKTI to support our new and existing exporters is welcome, though greater ability to direct that spending at a local level will be important, and this was set out in the recent Greater Manchester agreement. The extension of the Funding for Lending scheme for a further year may help some of those businesses that continue to find access to capital funding difficult, and the further increase in the allowances for research and development will be welcome, helping businesses to invest in their own growth. A further freeze in the fuel duty escalator will also help all aspects of business and individuals.
The Chamber of Commerce works at the heart of the local skills agenda, supporting businesses to grow their skills and staff through apprenticeships. The abolition of employers’ national insurance contributions on apprentices under the age of 25 will help businesses to mitigate the cost of developing their future workforce and, alongside the announcements in the Greater Manchester agreement to give GM greater control over apprenticeship grants may have a significant effect on the increased usage of apprentices across our region. For those who wish to invest in their own post-graduate qualifications, the establishment of a loans system to support them is also welcome.
In the first minute of the Autumn Statement the Chancellor mentioned the Northern Powerhouse and his commitment to strengthening our regions. The establishment of a northern sovereign wealth fund funded by the proceeds of shale gas extraction has the potential to provide significant funds for investment but only if government moves to support the establishment and growth of this industry. It still has many arguments to win over the public and business in this space but, if this fund is to be successful, the Chancellor must do much more to calm concerns over this new form of energy and allow potential companies to begin extraction.
Earlier in the week we saw the announcement of the £15bn investment in the strategic road network where the M60 and M62 will see substantial investment, as well as greater access to the new superport at Liverpool. Commuters and business people across the region will be delighted to hear that the next franchises for Northern and TransPennine Express will include provision for modern rolling stock to replace the outdated and unpopular Pacer trains. If the government’s northern powerhouse is ever to be successful, the speed and quality of public transport across the north must be radically improved, so we welcome the announcement of a comprehensive transport strategy for the north, working with Transport for the North, to include options, costs and a delivery timetable for HS3, and its interim report in the next four months.
Manchester benefits directly from two other key announcements. The £235m investment in to the Sir Henry Royce Institute of Advanced Materials, to be headquartered in Manchester, builds on the existing success of our universities in this space. An additional £113m will also be invested in an algorithmic and big data research facility in Daresbury. Finally, government has agreed to £78m towards the funding of a new theatre and performance space in Manchester on the site of the old Granada studios, further reinforcing Manchester’s leading position as an arts and cultural hub, not just of financial, creative and manufacturing businesses.
Overall, this is a positive statement from the Chancellor, but our future growth prospects will rely on seeing less timidity from government on investment support. We will assess the detail of the autumn statement over the coming days and will, over the coming years, ensure that we hold government to account on behalf of our members on the delivery of its promises announced today.
Miranda Barker, Business Development Director at BENCHMARK HOLDINGS PLC, said:
“It was good to see the re-statement of investment in key infrastructure projects to create the “northern powerhouse” which the Chancellor unveiled in Manchester in June - with particular investments in science and R&D especially welcome. This kind of positive support for industry is essential to maintain the substantial investment from the business community driving the manufacturing led growth, upon which the Chancellor's economic recovery depends. I also applaud the removal of National Insurance for apprentices under 25s and the removal of Air Passenger Duty for under-12s travelling on economy flights from 1 May next year and for all under-16s the following year.”