Business leaders – including those from the across Yorkshire and The Humber – have given their expert views on Chancellor George Osborne’s Autumn Statement.
Tim West, Tax Partner at EY in Yorkshire and Humberside, said: “Although the Chancellor celebrated the UK’s new role in the scientific expedition to Mars, much of his Autumn Statement was more grounded.
“We saw some old favourites, such as increases for Research & Development tax credits, an increase in the Personal Allowance, the freezing of fuel duty and the generation of almost £9bn from tackling tax avoidance.
“In particular, the banks proved again to be a source of significant funds – almost £3.5 billion over the budget period – with restrictions on their ability to utilise the losses of the past, giving the Chancellor a war chest to spend elsewhere.
“We also saw some new areas of focus. After much asking, the Chancellor announced a review of the structure of Business Rates, together with a cut for SMEs and others next year of almost £ ¾ billion, and finished with an £800m per annum cut with the introduction of a wholesale reform of stamp duty.”
John Cridland, CBI director-general, said: “These major changes on stamp duty and business rates will be a shot in the arm for families and growing firms as they look towards 2015.
“The targeted focus on enterprise is right, but business innovators would have liked to see more on research and development (R&D) to boost UK investment.
“International tax rules are in urgent need of updating, but the decision for the UK to go it alone, outside the OECD process, will be a concern for global businesses, and moving the goalposts on offsetting losses risks creating a worrying precedent.
“We welcome the continued commitment to deficit reduction, but real challenges lie ahead to reduce future public spending, and fresh thinking on public services will be essential.
“In the long term, growth is about people, science and infrastructure, and we warmly welcome the financial support for postgraduate science students.”
Simon Walker, director general of the Institute of Directors, said: “This was a disciplined, long-term and forward looking statement with welcome reforms for businesses, employers, savers and home-buyers. The Chancellor was right to resist the temptation of politicised giveaways, and focus instead on long-term investment in infrastructure, science and efforts to boost the UK’s productivity.
“Deficit reduction remains of primary importance and this statement did not shy away from that reality.
“The statement demonstrated what can be achieved with limited room for manoeuvre by focussing on considered tax reforms. We’re pleased that that the higher rate tax threshold is heading in the right direction, but more can be done to end the scandal of fiscal drag and we look forward to the details of how the Government will meet its ambition to raise the threshold to £50,000.
“It’s also vital that our economic debate recognises the share of revenue paid by the country’s top earners. The Chancellor acknowledged that the top 20 per cent pay more in tax than the remaining 80 per cent. The greatest burden is indeed being borne by those with the broadest shoulders.
“Continued support for entrepreneurs, exporters, SMEs, apprenticeships and key industries are particularly welcome, as are the radical reforms to Stamp Duty, which have long been called for by the IoD.”
Stuart Watson, Yorkshire and Humberside Senior Partner at EY, said:
“The UK economy needs a road network fit for the 21st century that isn’t just measured in terms of capacity, but also safety, environmental and social impact.
“The schemes around the A1 and the Trans-Pennine routes are part of a wider strategic initiative focused around building efficient connections across the Northern Powerhouse cities and connecting them to the wider economy.
“This will no doubt benefit directly industries such as haulage and the construction contractors who build these links, but they will also provide the transport framework that will drive wider economic benefits.
“Next steps for the Government will be to consider how to make best use of the existing network which could deliver additional capacity.
“Some of this requires decision makers in the region to iron out key bottlenecks and known black spots and such local initiatives need the devolved budgets to get on with the job.
“Some will require more eye catching solutions – This is being delivered under the managed motorway initiative in part, but with the additional investment in technology, the foundations will be laid for smart highways and motorways with the capability to implement initiatives such as driverless vehicles and potentially road charging in years to come.”
Tim Parr, Tax Partner at Baker Tilly in Leeds, said: ‘The biggest surprise of this Autumn Statement was the change announced to Stamp Duty Land Tax.
“This has always been an unpopular tax which has distorted the housing market, and the change will be welcomed by most home buyers.
“Changes to pensions will also be welcomed, as will news that widows and widowers will now inherit ISAs tax-free.
“This is particularly good for those people relying on an income from ISAs for their pensions, and will almost certainly be good for the ‘grey vote’.
“There were some sweeteners for small businesses with the improvement of R&D relief and the introduction of some new employment taxes measures.
“However, there is a danger that these could add to the administration burden on businesses.’
‘The Chancellor has also closed with immediate effect some significant tax planning opportunities involving partnerships and LLPs transferring their businesses to limited companies.
“Whilst this will cause a lot of extra tax to be payable in relevant cases, it was hard to argue that the hugely beneficial result previously available was fair.”
Michael Hilyer, Commercial Specialist at NFU Mutual in Northallerton said: “Today marks a positive step forward to putting local businesses back on the national agenda.
“As a local business support, we have seen how detrimental rising operating and resourcing costs can be to the local economy and community spirit.
“We hope that today’s announcements will encourage more businesses to come back to our high streets and increase career opportunities locally for young people.”
“From next year, businesses employing apprentices under 25 will not have to pay their National Insurance contributions, providing an incentive for small businesses to invest in the training of young people and reduce youth unemployment rates.
“And there is renewed hope for the future of our high-streets, as small retail businesses will also benefit from a 50 per cent increase on the ‘high street discount’ on top of existing small business rate relief, meaning some businesses will pay no rates at all.”
Harrogate Chamber Chief Executive Brian Dunsby expressed pleasure and relief that the Chancellor has actually made this commitment to replacing the very outdated Class 140 series “Pacer” Trains which are widely used, but generally despised.
Brian said: “They have been called ‘cattle trucks’ by the Deputy PM – or more charitably “Hogwarts Express” by those passengers who suffer the noisy, uncomfortable, slow and often unreliable services on the Harrogate line every day.
“This is just one of the reasons that the Chamber has been campaigning for electrification of the Harrogate line – and with that would come much more modern electric rolling stock, similar to those already running on the Airedale and Wharfedale lines.
“Recognition of the importance of rail connectivity to Leeds Bradford Airport is also welcome.
“We hope that the WYCA will see the logic in the Chamber’s detailed proposals for a new parkway station in between Bramhope and Horsforth which could be served by the existing airport long-stay car park shuttle busses.
“Then when the Harrogate line is electrified the airport would have a 15-minute frequency service to both Leeds and Harrogate, without the high cost and inevitable delays in planning and funding, waiting for a new direct track to the terminal and dedicated rolling stock operating to and from Leeds at a lower frequency which would not serve Harrogate, Knaresborough or York at all.”
Michael Craven, Head of Brewin Dolphin in Leeds said: “Whether it is new theatres, tax breaks or science investment, Osborne produced a statement to benefit non-Londoners with his plans for the regions… and even indeed for Mars.
“His plans for stamp duty will benefit those buying homes outside the capital, while the rest of his ‘Northern Lights’ strategy should provide even more regeneration across the country, which we see as good news for us and our 28 other offices and clients outside London.
“We really welcome the ability to pass ISAs intact to a spouse on death, a strategy we recommended to the Treasury. If you are drawing income from an ISA in retirement, suddenly discovering that income is no longer tax-free when your spouse dies is a huge blow.
“This allows people to plan properly and fairly for their old age.
“Radical reform of stamp duty irons out some huge anomalies, but for Londoners who have little choice but to pay prices that are out-of-kilter with the rest of the UK, this will be a small comfort as it maybe for the Scots, who have just heard details of their own new stamp duty regime following the Referendum.”
Simon Blowey, divisional director of Brewin Dolphin Financial Planning said: “We welcome the Chancellor’s clarification on tax avoidance schemes after last year’s lumping together of some schemes which has caused confusion.
“This should really help those who are merely trying to keep within the law while investing wisely in new and growing businesses. Tax changes to joint-life annuities when passed on after death go some way to levelling the playing field between annuities and income drawdown.
“It is unlikely to prevent many people shunning this form of lifetime income after Flexi-Day in April, but retirees should remember that annuities are still an option to consider.
“The new system for non-doms might be dubbed a ‘longer you stay, the more you pay’ strategy, which rightly charges those who are in this situation for the long term more than those for whom it is a short term, usually work related issue.”
Kevin Hollinrake, Managing Director of Hunters estate agents, with 125 branches nationwide, said: “We have already had deals secured as a result of this change. In our opinion, this is great news.
“For too long, stamp duty has distorted the market deterring sellers from marketing their homes and buyers from buying them in the dead zones above the key thresholds such as £250,000 and £500,000.
“This should mean more property coming onto the market, and therefore, more sales which is good for the housing market and the economy as a whole.”