Ah, the Autumn Statement. A taste of the Budget to come. An ever-divisive statement greeted with 'ooh's and 'ahh's by some, and 'boo's and 'bah's by others. Osborne's announcement on public sector pay may have stolen the show in newspaper headlines, but here's what the Autumn Statement means for the beating heart of the UK economy, the SMEs.
Credit easing
Osborne has announced a credit easing programme for SMEs worth up to £40bn. The first tranche of cash - £20bn - will be made available over the next two years. Want a loan underwritten by government? Get in line now.
£1bn business finance partnership
It's not all about the little guys, medium-sized firms are in for a boon too. The Chancellor is planning to make sizeable investments in funds that provide financial assistance to UK businesses as part of a joint partnership with other investors - mainly pension funds and insurance firms.
Extension of the Enterprise Finance Guarantee Scheme
The Enterprise Finance Guarantee scheme will now include businesses with annual turnovers of up to £44m.
Business rate relief extended
Small companies with a rateable value of between £6,000 and £12,000 will be let off from paying business rates until April 2013, extending their holiday for a further six months.
Enterprise Investment Scheme extended to start-ups
From April 2012, anyone investing up to £100,000 in a new start-up eligible for the EIS will receive income tax relief of 50%. The government will also waive any tax on capital gains invested through the new scheme. This relief will only available for one year.
Subsidised private sector work placements
Youth unemployment is the hot potato being juggled by the Coalition right now. To try and get young people working, Osborne proposes a new youth contract worth nearly £1bn. The new package will offer work experience placements to every young person if they've been unemployed for more than three months and there will be 160,000 wage incentives of £2,275 available for private sector employers to subsidise the costs of taking on these young and jobless.
Bank levy to rise
The levy on British banks will increase from a 0.075 per cent to 0.88 per cent annually this coming January. HMRC will bag around £2.5bn a year through this tax.
£5bn guaranteed spending on roads and rail
The government is planning to spend £5bn over the next three years on sorting out UK roads and rail networks. By better connecting the regions, Osborne believes he can foster enterprise across the whole of the UK.There are currently 35 road and rail projects rubber-stamped to go ahead in 2012.
Fare rises to be capped
The extortionate price of travel in this country is a long-standing bugbear for business owners. Osborne's capping the further increases at at 1% above RPI inflation.
Early 3p rise in fuel duty scrapped
While we're on the topic of getting around, filling up the car isn't going to get any more painful than it already is. A 3p rise in tax on both unleaded petrol and diesel was due to come into effect on January 1 but this has been cancelled. The 5p tax rise due next August has been reduced to 3p.
The word on the street
Here's what the small business lobbyists, UK entrepreneurs and enterprise experts have to say:
'The downgraded forecasts and outlook were no surprise, but the Eurozone crisis is still hanging over us. The Government's dogged commitment to budget deficit reduction remains the only way to maintain the UK's triple A credit rating and low interest rates on international money markets.'
John Cridland, director general, CBI
'Taken as a package, the announcements in the Autumn Statement address many of the concerns raised by small businesses and are therefore to be welcomed. The key now is for the Government to be consistent, and set to the task of translating these policy intentions into tangible actions on the ground.'
John Walker, national chairman, Federation of Small Businesses
'Being a sailing chap I'll use the analogy that the UK is a sailing ship in the middle of a European debt storm. To avoid being sunk by it, should it a) batten down the hatches and ride it out, b) hoist a spinnaker, fill it with more debt and attempt to outrun it or C) maintain full sail, increase the crew on watch & keep going?
'In my opinion, George Osborne has chosen option c) and this is what I would do. The UK must reduce structural deficit and not increase its borrowings by hoisting a spinnaker. It may well capsize, and be punished by external factors, markets deeming it riskier, increasing interest rates and costing it dear – and all who are in it. Osborne is sticking to his strategy and not tacking into the storm. This is correct, in my opinion.
'By maintaining its credit rating (seaworthiness) it can secure £40bn at good rates to improve finance-ability for small businesses at lower interest rates. Good. £40bn is a punchy number and as long as our (majority state owned banks) do what they should, this is good.'
Will King, founder of King of Shaves
'The news that the government will underwrite GBP 40 billion of loans to smaller companies is a great boost for SMEs. However, the growth projections announced by the Chancellor will also have an impact on consumer spending, which could encourage SMEs to consider turning their attentions to international markets. This much-needed fiscal boost could represent an opportunity for them to kick-start exporting programmes. Last year exports constituted 29% of the UK's GDP, showing there is real scope for SMEs to exploit the full potential of emerging overseas markets such as the "BRIC" nations of Brazil, Russia, India and China.'
Phil Couchman, CEO of DHL Express UK & Ireland
