The Cornwall and Isles of Scilly Local Enterprise Partnership (LEP) has been giving its reaction to today’s Autumn Statement.
The Chancellor confirmed that LEPs across England will share £1.8 billion of regional growth funds, with £191 million earmarked for LEPs in the south west, including Cornwall and the Isles of Scilly.
Chief executive, Sandra Rothwell, said: “What we don’t yet know is how much of the £127 million we have bid for will be allocated to us, but it will clearly be less than we have bid for and we know the fund was three times over-subscribed. We expect more detail soon and continue to work behind the scenes to argue our case for investment. It will be interesting to see to whether the Government’s preference for elected mayors in the regions impacts on allocations.
“We welcome the Chancellor’s focus on infrastructure, innovation and tackling the productivity gap, including investment for digital networks and local transport, although it remains to be seen how this investment will filter through. The commitment to deliver more affordable homes in areas of greatest need is very welcome news, together with the new Housing Infrastructure Fund to open up sites for housing growth.
“There is good news for rural businesses with rate relief increased to 100%, which could be worth almost £3,000 a year, but we need to understand how that could potentially impact on local authority funding. The increase in the minimum wage is also good news for raising living standards, although its impact in our area could be felt disproportionately given our micro-business economy.
“We welcome the Chancellor’s pledge to maintain the decrease in corporation tax to 17% by 2020, and there is good news for investment in business with £400 million of venture capital funds being made available through the British Business Bank.”
Meanwhile, David Beaumont, regional director for SME Banking in the South West at Lloyds Bank Commercial Banking, welcomed the Government’s commitment in cutting Corporation Tax
He said: “We spoke to local businesses in the lead up to the Autumn Statement, and half told us that cutting Corporation Tax was at the top of their wish list, which makes today’s announcements welcome news for South West firms.
“We could see the Government’s latest pledge to cut the tax to 17% stimulate regional growth by freeing up capital to invest in new talent, technology and trading overseas.
“The Government’s £1.8 billion investment to improve roads and railways should also be welcome news for SMEs across the south west, as earlier this year, they told us that lack of infrastructure spending was holding them back.”
Bishop Fleming welcomed the investment in infrastructure and the review of R&D incentives, but expressed disappointment that there was no commitment to reducing business red tape, or reforming business rates. Neither was there any promised let up for landlords who from next year will face massive tax rises ushered in by the Chancellor’s predecessor.
“The promise of extra funds for innovation and R&D will help businesses, though the amount needed will have to increase over time as it’s not really anywhere near enough.
“Confirmation that corporate taxes will drop to 17% will make the UK a tax haven to make us attractive for inward investment – though the disparity between personal and corporate rates could lead to a rush to incorporate.”
The Bishop Fleming partner also noted that most businesses had been braced for an increase in petrol prices, “but having frozen fuel duty yet again there was a tangible sigh of relief,” he said.
Private wealth partner at Stephens Scown, Malcolm Emery, commented: “With the impact of Brexit likely to hit consumers’ pockets soon, it is a shame that the Chancellor did not take this opportunity to reduce the standard rate of VAT; perhaps this is his big surprise for next year’s Autumn budget?
“Overall, it was a relatively quiet Autumn Statement although they do say that the devil is in the detail. We will know more when the Finance Bill is published on 5 December 2016.”
Ann Vandermeulen, development manager at the Federation of Small Business in Cornwall, said: “Cornish businesses will be relieved once again that fuel duty has not been subjected to an increase as this is a big cost for the majority in our rural county. They will also be pleased to hear about investment into infrastructure in both transport networks and broadband. However how that translates on Cornish turf is yet to be seen as we have been playing catch up with our failing networks for far too long!
“Improvements to Rural Rate Relief and plans to remove more of our members from the business rates system is encouraging and again we will wait to hear from those picking up the bill just how effective this is in helping them to manage ever increasing overheads. Overheads such as the rise in the living wage being imposed from April, going up by 30p an hour from £7.20 to £7.50 which needs to be covered somehow. So announcements of swings and roundabouts for us really.
“Finally it is pleasing to hear that our South West Local Enterprise Partnerships will be getting some more cash and further investment will be made into the British Business Bank. We will be monitoring closely the plans for this extra money to ensure that small businesses can benefit and can have a slice of that growth agenda that Mr Hammond spoke of today. Perhaps by doubling UK export funding capacity, also announced today, this will enable more small businesses to tap into some extra help to export which can be a lucrative route to market for many trading on a peninsular such as Cornwall.”