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Forum of Private Business responds to the Chancellor’s Autumn Statement

Phil Orford MBE, Chief Executive of the national small business organisation The Forum of Private Business, has responded to today's Autumn Statement from the Chancellor, George Osborne:

"There are some positive measures in today's speech to help reduce the cost of doing business. With fuel duty frozen, £1000 rebate on business rates and a subsidy on employing young people, there are measures worth thousands to small businesses. Within a time of constrained budgets, it‘s good to see the Chancellor has listened to the concerns of small firms around rising costs.

"Of course there are other issues not addressed directly today, but upon which work is ongoing. Top amongst these is energy prices. We are working hard to ensure members benefit from any reining back of green taxation."

On borrowing and growth

"The fact that borrowing is coming down is welcome, but of course once the deficit is reduced the UK will need to start repaying its debt. This could start to happen by 2018-19, though forecasts are notoriously tricky. What this does mean is there remains little room for manoeuvre in this Parliament and next.

"If unemployment does fall to 7% in 2015, that could well be the trigger a rise in interest rates. This should be a warning for businesses struggling with borrowing at present. It is vital they do what they can to improve cash flow over the next 24 months so that any interest rate rises do not cause further damage. If we feel businesses can't yet cope with such rises, we will lobby the Treasury and the Bank of England to not raise rates."

On business rates cap at 2%, extension of Small Business Rate Relief for another year and £1000 discount on Business Rate bills for retail premises with up to £50,000 rateable value

"97% of businesses feel property taxation is too high so the extension to Small Business Rate Relief and the cap on business rates to 2% are both welcome, but sit at the lower end of what the Forum of Private Business was asking for. We feel there needs to be a more fundamental review of business rates and the link to inflation also better transparency over where the rates go.

"The £1000 further discount for retail properties with a rateable value of less than £50,000 was an unexpected surprise and hugely welcomed. With councils freezing or capping Council Tax, businesses continue to pay a higher proportion of local taxation without seeing real benefits. The system needs a proper review and businesses need more transparency as to where their money is going."

On Fuel duty freeze

"The fuel duty freeze is working for businesses. Less are reporting petrol as a primary cost concern, although of course it remains significant. We welcome the fact that savings have been found to further extend this freeze, saving businesses around £1200 since 2010 according to the Treasury. We are pleased they listened to the voice of small business on this issue."

On export finance

"The more money to support export the better so we welcome this doubling of funds. A large proportion of this needs to support first time exporters and for existing exporters to do so to new markets. The Government should consider using this money to subsidise exporting into new markets. "

On banks sharing SME credit data

"A lack of information on SMEs' creditworthiness is an issue highlighted by business groups, the Competition Commission and the Breedon Review, as well as challenger banks. It is a barrier to lending and needs to be resolved. The Government's consultation is a necessary next step to get ideas on how this can happen but it is the commitment to legislate in the next session of parliament which is important, ensuring action is speedy and allowing businesses to look outside of the main banks for finance." 

On additional funding for start-up loans

"A successful and proven policy that merits additional investment we applaud the work of Lord Young and others in getting this scheme up and running and this money is needed to meet higher than expected demand and allow the scheme to roll out to all ages."

On measures to train 18-21 year-olds for work and the scrapping of NI employers contribution for under 21 year-olds

"Measures to tackle youth unemployment were outlined to improve supply and drive demand. On the supply side there was a clear emphasis on the need to ensure young people have the basic skills required for work. 18- to 21 year-old claimants without a level 2 qualification in English and Maths will be required to work towards those qualifications to receive their benefit. For 16 and 17-year-olds looking for work, Job Centre Plus will deliver targeted support to help them find apprenticeships and traineeships, in partnership with local authorities.

"In terms of demand, from 2015 employers will not have to pay employer NICs for those under the age of 21. This will be on top of the Employment Allowance that will allow employers to save £2,000 on their National Insurance bill.

"The Government is continuing to incentivise businesses to take on young people and we hope these measures will have that effect."

On the extension of the New Enterprise Allowance to March 2016

"The New Enterprise Allowance helps unemployed people set up their own businesses so it is great it will be extended to March 2016. People are entitled to a weekly allowance up to £1,274 paid over 26 weeks and access to a loan and should drive further people to take the path of self employment."

On £250m of funding to the British Business Bank

"This is £250 million for new programmes to specifically support smaller businesses, in addition to the £1 billion new capital allocated at last year's Autumn Statement. This, together with the refocusing of Funding for Lending on small businesses, will help address issues of confidence in SMEs that they can get money to make investment."

The additional investment in higher apprenticeships
 
"Directly funding employers for the training costs of apprentices will radically change the apprenticeship system in England and require providers to deliver the skills employers require. Designing this around the tax system is preferable as employers do not want to be put off from taking on apprentices because of a complex new system. The Forum will work with the government as this policy develops to ensure that access to apprentices for small businesses is widened rather than restricted." 

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