East's business groups' mixed verdict on autumn statement

His autumn statement met with a mixed reaction from business groups - many of whom are deeply fearful for the future.

Federation of Small Businesses (FSB) East Anglia's Candy Richards criticised added tax burdens and a "stealth tax" approach as thresholds - including on income tax and VAT - were frozen. Many small businesses were also facing "acute" rises in costs, she said.

“The slashing of dividend taxation allowances will be a bitter blow to hard-working owners of small limited companies trying to pay the bills, earn a living, and grow their business," she said.

"This is a group which was excluded from direct support during the darkest days of Covid, then more recently pushed out of the cut in National Insurance.

“The changes set out by the chancellor will leave a company director earning £40,000 a year more than £500 worse off than an employee earning £40,000 and paying income tax and National Insurance.

“Freezing the threshold for employer National Insurance at a time of such high inflation is a stealthy hike in the jobs tax, just as recessionary pressures threaten an increase in unemployment."

While describing a rise in the minimum wage to £10.42 as "understandable", she warned of the effects of adding more costs to business.

"The few saving graces here are the retention of the Employment Allowance at its current level, which was hard fought for by FSB, and the continuation of the lower National Insurance rate for the self-employed and employees."

She also slammed changes to the Research and Development (R&D) tax credit scheme but welcomed better news over business rates.

"Alongside significant expansion of relief for small firms in retail, hospitality and leisure, this is a positive change," she said.

She also welcomed the retention of an energy support package for small firms until April.

“The chancellor may consider that today’s Statement has steadied the economic ship after recent turbulence.

"But it is now time to set a course towards economic recovery, promoting enterprise and innovation, and future prosperity. Whether that direction is set in the coming months is a decision which will be make or break for many small businesses.”

Nova Fairbank, chief executive of Norfolk Chambers of Commerce, said Mr Hunt had focused on financial stability and supporting the most vulnerable in society and welcomed the measures for business rates and employment allowance.

She also welcomed plans to improve energy efficiency, but  feared for the future once the government's Energy Bill Relief Scheme ends on  March 31, 2023

"In the teeth of a recession, this statement will not increase business confidence," she warned.

"The government must do more to improve conditions for businesses to invest and grow, otherwise we will be starting from a weak base to power our recovery once global economic conditions stabilise." 

Paul Simon of Suffolk Chamber said the organisation continued to lobby for upgrades to the A14 and east/west rail freight capacity and improved broadband and mobile infrastructure.

"Suffolk Chamber is pleasantly surprised by some of the headline announcements, not least as they represent significant campaign successes for us and our partners," he said.

The chamber was disappointed at the lack of progress on a wholesale review of business rates but pleased at the shelving of an online sales tax which it feared would have unintended consequences, he said.

The freezing of VAT and National Insurance thresholds was also a concern against a backdrop of "rampant" inflation and supply chain woes.

“The Office for Budgetary Responsibility (OBR) forecast that business investment will continue to fall is in accord with our recent research and does not bode well for growth and jobs going into 2023," he said.

"In this regard, the Autumn Statement offers little immediate reassurance to Suffolk’s business owners."

CBI East of England director Richard Tunnicliffe said the chancellor deserved credit for delivering stability - but more needed to be done on growth.

"Businesses will view a freeze in NICs thresholds and further windfall taxes as the sharpest stings in the tail. Firms will also need more detail on what happens with the business energy support scheme in the coming weeks," he said.  

“The statement laid down "an important marker" for the direction of the country, he added. 

"Business will work with government to turn today’s ambitions into a serious plan for growth that can lift us all out of the current crisis.”