The Federation of Small Businesses (FSB) has said the Chancellor’s Autumn Statement, delivered today, builds on economic growth and will provide real help for small firms’ overheads through action on business rates and fuel duty.
Ted Salmon, FSB North East regional chairman, said: “Today’s Autumn Statement represents steady progress, with a range of announcements that address members’ concerns in the cost of doing business, with action on business rates and confirmation that next year’s fuel duty rise will be cancelled.
“The statement is a sobering reminder about the scale of the deficit the country faces and the tough choices which need to be made. We therefore welcome the use of what spare resources the Chancellor could find to focus tax cuts on encouraging firms to take on younger workers, which must be an overriding priority.”
Highlights of the announcement have included a rise in the state pension age to 68 in the mid-2030s and to 69 in the late 2040s. In April 2014, the state pension will rise by £2.95 a week.
Anyone aged 18 to 21 and claiming benefits without basic English or Maths will be required to undertake training from day one or lose their entitlement. People unemployed for more than six months will be forced to start a traineeship, take work experience or do a community work placement or lose benefits.
Employer National Insurance contributions are to be scrapped on 1.5million jobs for young people.
The Chancellor also announced that the economic growth forecast for this year increased from 0.6 per cent to 1.4 per cent, and is revised up for next year from 1.8 per cent to 2.4 per cent, but is then down slightly for the following three years to 2.2 per cent, 2.6 per cent, and 2.7 per cent.
Mr Salmon commenting on specific measures, starting with business rates.
Rates in England are to be capped at 2 per cent rather than linked to retail price inflation (RPI), with some retail premises in England to get a discount. Businesses moving into vacant high-street properties will have their rates cut by 50 per cent.
Mr Salmon said: “Action on business rates was the top priority for our members, and the Chancellor has addressed some of their concerns in the Autumn Statement.
“Too many businesses suffer from yearly price rises so capping business rates increases is a welcome measure. With around 300,000 firms relying on 100 per cent rates relief, extending the doubling of small business rates relief will be welcomed by many.
“Relaxing business rates for those firms that want to expand and incentivising new businesses into empty properties on the high street will boost retail and town centres Retailers on struggling high streets will be especially heartened by the additional £1,000 relief.
“The commitment to clearing the appeals backlog and reviewing the system is a major step forward. What remains outstanding is a fundamental reform of business rates, which we will continue to press for.”
The Chancellor announced employers’ National Insurance contributions for workers aged under 21 will be scrapped.
Mr Salmon said: “Youth unemployment is a deep concern for us in the North East– particularly those out of work for more than 12 months. Evidence suggests the longer a young person is out of work or training, the harder it is for them to secure a job.
“This surprise tax cut is recognition that extra efforts are needed to get young people into employment. This should be coupled with improving the education system to ensure that all young people hold the functional and soft skills necessary to succeed in today’s tough jobs market.
“We look forward to seeing further details to understand how small and micro businesses might benefit, including how this links with the Employment Allowance which comes into force next April.”
The Chancellor announced that an additional 20,000 apprenticeships are to be funded over the next two years.
Mr Salmon said: “We welcome the principle of direct employer funding of apprenticeships. We have said Government needs to take its time with reforms to make sure it gets it right first time. It also needs to seriously consider how to make the transition smooth and keep small businesses engaged.
“Further consultation on proposals is needed because as it stands the proposed system could alienate the smallest firms from taking on an apprentice, at a time the Government is looking for more engagement.
“In particular, many micro and small businesses will be put off engaging if the costs significantly increase. To keep participation rates up, it’s vital to consider how to make sure their costs don’t increase. Added to which the system must be easy to use and not expect upfront payments before the business can recover the Government contribution.
“The commitment to expand higher apprenticeships will help more and more young people think about this as a route into a career that leads them right to the top of business.”