Thursday, December 4, 2014

News: Autumn Statement 2014

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Rothbiz editor, Tom Austen picks out some of the announcements made by Chancellor George Osborne in his Autumn Statement, an update on the Government's taxation and spending plans.

The headline-grabbers were the changes to stamp duty and the political bean-counters arguing over which way public borrowing and the deficit are heading but there were a few nuggets in the speech and the small print that will be interesting for Rotherham and its businesses.

The Chancellor began by saying that the government would be boosting "our skills, our exports, our science and our infrastructure."

Support for businesses involved extending existing schemes such as the Funding for Lending Scheme that focuses incentives towards supporting SME lending. £400m will go to extend venture capital funds which invest in SMEs, called Enterprise Capital Funds and the Business Bank, based in Sheffield, will administer £500m of new bank lending allocated under the Enterprise Finance Guarantee Scheme.

£20m was announced to support for first time exporters which includes more UKTI advisors and overseas events, and help for businesses to access new markets through the internet.

Small businesses are to be supported in accessing R&D tax credits and £61m was announced for centres such as the AMRC and Nuclear AMRC to work with smaller companies.

The Government continues to tinker with business rates, extending the Small Business Rate Relief to April 2016 and extending the cap on how much they can increase. Additional support for the retail sector sees the £1,000 business rates discount for shops, pubs, cafes and restaurants with a rateable value of £50,000 or below, increased to £1,500 in 2015-16.

Osbourne added that the Government will carry out a review of the future structure of business rates to report by The Budget 2016, but this is not quickly enough for some with rates valued at pre-recession levels.

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Regarding economic development, nothing was confirmed regarding devolution for South Yorkshire but the Chancellor said that "his door is always open" if areas wanted to follow Manchester's lead.

A further £1 billion has been allocated for Local Enterprise Partnership (LEPs) from the £12 billion Local Growth Fund which will see areas bid in a second wave of Growth Deals. The Government will also consider the case for extensions to existing Enterprise Zones at the Budget, subject to value for money and affordability.

The Government also intends to set up a long-term investment fund from tax revenues from shale for the North and other areas hosting shale gas developments, "to capture the economic benefits of shale gas for future generations."

The New Enterprise Allowance scheme is being extended from January 2015 and the government is making it cheaper for employers to take on an apprentice by abolishing employer National Insurance contributions for apprentices aged under 25 on earnings up to the upper earnings limit. This means that employers of around half a million apprentices will be exempt from paying employer National Insurance contributions.

Announcements already made this week included investment in roads, and an interim report on Transport in the North is expected in March 2015, covering issues around HS2 and HS3 supporting the Government's vision for a "Northern Powerhouse."

Many believed that the Chancellor stated that the ancient Pacer trains operating in the North will definitely be replaced. However, the statement just says that bidders for the new franchise will be encouraged to replace the outdated pacer trains with modern, better quality trains.

A significant amount was announced this week for flood defences. This includes £1m for defences at Canklow, Catcliffe and Woodhouse Mill, smaller council-lead schemes around the borough and the large £19m Phase 2 of the Rotherham Flood Alleviation Scheme, which was added to the pipeline of projects. Funding needs to be found for the six year programme from the town centre to Kilnhurst that adds to the schemes from Templeborough and Sheffield's Lower Don Valley.

Images: HM Treasury

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