Businesses – including IOE and IT members – respond to the Autumn Statement

Wed 22 Nov 2023
Posted by: Phillip Adnett
Trade News
Business Meeting

Earlier today (22 November), chancellor Jeremy Hunt unveiled his Autumn Statement, headlined by a series of tax cuts and rate freezes, as well as a raft of other policies.

You can read our full coverage of what was announced here.

The IOE&IT Daily Update here rounds up how our members, and others, responded to Hunt’s announcements.

Concrete Canvas

Will Crawford, director at Concrete Canvas, said he was pleased with the cuts to National Insurance Contributions (NIC), calling them “sorely needed.”

“As a manufacturer, we also welcome the extension of ‘full expensing’ for capital investments. However, more needs to be done to encourage research & development (R&D) investment.”

He added he was “disappointed that there wasn’t more in here to promote growth to the green economy, particularly energy generation and building insulation.”

“As a company which invests heavily in R&D, we would like to see a reversal of the huge cut to R&D tax relief for SMEs brought in last year.

“UK manufacturing will struggle to remain internationally competitive until we address the high cost of energy by investing in renewable energy, as well as encouraging the technologies of the future with more help for SMEs conducting cutting edge R&D.”

Sylwia Nowak

Sylwia Nowak, senior customs and foreign trade compliance officer at Brose Group, said that there were some positive details in the statement relating to trade digitalisation.

“The section on digital technology and AI nicely corresponds with the development of the UK Single Trade Window, Cerberus, CDS and GVMS systems, as well as the broader 2025 UK Border strategy. Any attention and investments given to this sector are very much welcomed by the trade technology geeks, like myself.”

Nowak was also supportive of new funds (£4.5bn) to support strategic manufacturing sectors, as well as other policies to promote further UK investment and growth.

She said that it was “great to hear about the next set of investment zones in Greater Manchester and the West and East Midlands, as well as doubled flexible funding,” but wondered about the UK’s less economically prosperous regions

“I believe that areas where more job opportunities are needed should be the priority. Also the businesses should be better incentivised to invest in new regions.”

Overall, Nowak said that “the Autumn Statement looks encouraging especially when it comes to digital technology and AI, R&D incentives and industry investments, because I believe the UK's focus on innovation will build a safer and more stable ground for us and future generations.”

Talking Tables

Mark McCormack, director at Talking Tables, also praised the NIC changes and the confirmation of the full expensing relief.

“I think the 2% cut in employees NIC is a welcome boost to the wage packets of the UK workforce, worth up to £754 a year, so helping with the cost-of-living crisis.

“This will in turn assist employers who are having to meet ever greater demands for pay increases or dealing with increases in the national minimum wage.

“The confirmation of full expensing being not only extended but made permanent is also good news, although this was expected.”

He said that one aspect of the statement he did not like was on businesses tax.

“The increase in the main rate of corporation tax from 19% to 25% was a steep increase when announced in 2021 by then-chancellor Rishi Sunak.

“Then-prime minister Liz Truss promised to not implement this increase in autumn 2022 but after her political demise it was implemented after all on 6 April 2023.”

McCormack said he thought that “an opportunity has been lost to lower this to 23% from 6 April next year.”

He noted that he had “not seen anything that specifically assists imports and exports.”

Associations

Industry and media figures also responded to the chancellor’s announcements.

The British Beer & Pub Association welcomed the decision to freeze beer duty until August 2024 and maintain business rate relief for pubs, with CEO Emma McClarkin saying these would policies save the sector £350m.

Manufacturing association Make UK said that it was “glad” the chancellor listened to its call to make the ‘full expensing’ relief permanent.

The Federation of Small Businesses (FSB)’s policy chair, Tina McKenzie, singled out the “welcome action” on late payment practices, calling it a “scourge” for smaller firms who face being treated as a form of “free credit” by large corporates.

Hunt had said that he would introduce tougher regulation on late payers to support SMEs.

Journalists

The BBC’s chief economics editor, Dharshini David, said that the UK’s tax burden was still “still set to rise to a post-war high, according to the Office for Budget Responsibility (OBR).”

“It says the largest contribution to that is the freezing of most thresholds related to taxes on incomes, so they don’t rise with inflation.”

Nick Macpherson, a former senior official at the Treasury, said on Twitter/X:

“Credit to Mr Hunt though for funding national insurance cut by raising income tax. Turns practice of last 40 years on its head. Benefits workers and young at expense of rentiers, capitalists and pensioners.”

Sebastian Payne, a former FT journalist, candidate for Conservative MP and current head of centre-right policy outfit Onward, said

“Today's Autumn Statement showed the best of moderate, optimistic conservatism — combining bold measures to boost growth and slash taxes, with support for struggling workers and families.”