Analysis: Autumn Statement – what was in it for Wiltshire businesses?
They say no news is good news, and that was certainly the feeling of tax expert Richard Mathews, of Swindon-based chartered accountants Banks, who suspected the chancellor George Osborne would use the Autumn Statement to pull some nasty surprises from up his sleeve.
But as the chancellor took his seat after delivering a 45-minute statement bereft of shocks and surprises, Richard was able to breathe a sigh of relief on behalf of his own firm and his clients.
“I thought we were going to get hammered,” he admitted to Swindon business leaders at a post-Statement briefing, “but it was a neutral Autumn Statement, and that’s a relief to me.”
Banks had put together a panel of experts to give their take on the chancellor’s announcements, just hours after he delivered them.
Andrew Kirk, senior manager at Lloyds commercial in Swindon and Newbury, was first to the lectern, finding the capping of business rates increases at two percent worthy of mention.
In the retail sector, Mr Kirk said, “some of the small independents are squealing”. He said he knew of independent shopkeepers in Swindon paying £50,000 a year in rent – the levy to which business rates are linked.
The chancellor’s cap would be a help. “It’s small, but he’s doing something,” said Mr Kirk.
Meanwhile, the banker celebrated the news that 20,000 apprenticeships are to be created in the manufacturing sector, funded by HMRC. “That’s got to be good for UKPLC,” he said.
And in summary? “I’d call it neutral, to be honest.”
Quite rightly, Paul Himple of Go Legal HR pointed out that announcements on employment law were no longer the preserve of the Budget, or the Autumn Statement, but were drip-fed throughout the year.
So he took the opportunity to look at some of the changes to legislation of which business owners should be aware, after examining one of the key features of the Autumn Statement: the increase in the age at which people will receive the state pension.
Although an increase was always planned, the chancellor used the Autumn Statement to pull it forward.
People retiring after 2027 will qualify for the state pension at the age of 67, but the pension milestone will increase incrementally, said Mr Himple, meaning people in their 40s will have to wait until they are 68, people in their thirties won’t see a pension book until they are 69, and people in their twenties can expect to work until they are 70 before they see a penny.
The news that parental leave would be extended is something you’d have expected to find in the Autumn Statement, but the chancellor’s coalition partner Nick Clegg was so excited about it, he decided to announce it a week ago.
New mums and dads will now be able to share their leave, meaning men will be entitled to take nearly a year off work to mind the baby if they so wish.
“That will create challenges for businesses, especially small ones,” said Mr Himple. Changes to the law surrounding flexible working arrangements for parents would also create a challenge for bosses, he said.
Independent financial advisor Amanda Barnett, of Grosvenor Consultancy Limited, returned to the state pension, calling it the hot potato of the Autumn Statement.
She said she was relieved that there seemed to be no apparent changes proposed to personal pension legislation. “The government has been playing around with it a lot lately,” she pointed out. “Hands off is good news.”
And she pointed out that workers would have to build much bigger pension pots to enjoy a quality retirement: The government expects only a third of pensioner’s incomes to come from state pension in the future.
Richard Matthews highlighted good news and bad for personal tax payers – with the income tax threshold increasing to £10,000 a year from April, but the point at which people enter the higher rate of tax of 40p falling to just under £42,000.
None of that was new news, of course, and neither was the married couple’s allowance, which was set in stone by the chancellor but had been trailed by the prime minister earlier in the week.
Mr Matthews welcomed the freeze in fuel duty – “important for business” – and the £2,000 National Insurance Contributions employee allowance, from which businesses will benefit from next April.
There were also cheers for the announcement that employers will be incentivised to hire young people through a National Insurance contribution cut for under-21s.
“Get yourself a load of 16 to 21 year olds,” was Richard’s playful advice to employers.