Autumn Statement Summary 2011
On 29th November 2011, the Chancellor of the Exchequer, George Osborne, announced the Autumn Statement which provides an update on the Government’s plans for the economy, based on the latest forecasts from the Office for Budget Responsibility.
Small businesses across the UK have seen the devastating impact that excessive red tape and lack of funding have had, however some elements in this Autumn Statement offer chinks of light amongst the Chancellor’s doom and gloom.
Businesses in need of finance
Guarantees - The Government is to back £20 billion of business loans under the National Loan Guarantee Scheme. The scheme will lower the cost of bank loans for smaller businesses. Ministers hope the scheme will be live by the start of 2012 and it is envisaged it will run for the next two years. The scheme should deliver up to a one percentage point reduction in the cost of a business loan.
Affordable mortgages - Under the New Build Indemnity Scheme, the Government hopes to increase the supply of affordable mortgages. The Government and house builders will provide security for the mortgages and home buyers will only require a five per cent deposit in order to purchase a new build house or flat. The scheme should help around 100,000 families and first time buyers to buy their own home plus increase opportunities for self employed builders, plumbers, plasterers and electricians to name but a few.
Right to Buy Scheme - Firstly, the Government will increase the discounts on the market value of homes purchased under the Right to Buy Scheme. And secondly, for each home purchased, the Government will provide an extra affordable home – in addition to the 170,000 already planned through the new Affordable Homes programme.
Small businesses that employ staff
Unfair dismissal - The qualifying period for unfair dismissal claims will increase from one year to two years from April 2012, to help reduce employers’ fears about taking on new staff. The Government also announced that it will be considering how the dismissal process could become simpler, quicker and clearer.
Compensated No Fault Dismissals - The government will be seeking views on the introduction of Compensated No Fault Dismissals for micro-businesses with fewer than ten employees. Under such a system, employees could be dismissed without employers having to cite a particularly reason, but happy in the knowledge that the notice period and pay would be predetermined and there would be no fear of tribunals (provided no discrimination is involved).
Fees – The Government will introduce fees for individuals who want to bring cases to employment tribunals. The level of the fees will be consulted on.
Work experience - All unemployed 18 to 24 year olds will be offered work experience or a Sector Based Work Academy place after three months on Job Seekers’ Allowance.
Incentives - The Government will provide an estimated 160,000 wage incentives of £2,275 each to entice employers to recruit young people.
Red tape – Deregulation is firmly on the Government’s agenda and as part of this; they have pledged to accept a recommendations review of health and safety regulation and look to go further with its Red Tape Challenge.
Fuel Duty – The fuel duty increase of 3 pence per litre that was due to take effect on 1st January 2012 will no longer occur. Furthermore, the increase planned for 1st August 2012 of 5 pence per litre will now only be 3 pence.
Small businesses operating from premises
Business rates - The Small Business Rates Relief holiday will be extended by six months from 1st October 2012.
Deferral – The Government will also give businesses the opportunity to defer 60 per cent of the increase in their 2012/13 business rates bill (as a result of the Retail Price Index uprating) and repay it equally across the following two years.
Businesses seeking planning permission
Non-planning consent – The Government will introduce a 13-week maximum timescale for the majority of non-planning consents, which will take immediate effect for Government agencies.
Appeals - The Government will ensure that there is a more effective system for applications to obtain an award of costs, if there is an appeal against an unsuccessful planning application where a consultee has acted unreasonably. This should start to be implemented in summer 2012.
Agricultural buildings – The Government will consult on proposals to allow existing agricultural buildings to be used for other business purposes such as offices and retail space.
Small business owners with a family
Child and Disability Tax Credits – The child element of the Child Tax Credit and disability elements of tax credits will be uprated in line with the Consumer Price Index (CPI) in 2012/13. By using the CPI, these tax credits should fluctuate according to changes in consumer spending patterns relative to changes in the price of goods and services. This should mean that the child element of the Child Tax Credit will increase by £135 but the Government will not be going ahead with the planned £110 above-inflation increase.
Working Tax Credits - The couple and lone parent elements of the Working Tax Credit will not be uprated in 2012/13.
Live Updates as they happened on 29th November 2011
- 12:20 George Osborne Has left the Treasury and is now heading for the House of Commons
- 12:35 OBR revises GDP forecast for 2011 down to 0.9%
- 12:35 OBR not predicting another recession
- 12:46 Osborne asks the Unions to call off the strikes #AS2011
- 12:48 Pension credit to increase by £5.30
- 12:50 State pension age to increase from 66 to 67 in 2026
- 12:53 Osborne hoping credit easing measures will reduce interest rates paid by small businesses by 1%
- 12:55 Osborne to reinvigorate the Right to Buy Scheme
- 12:58 Over 500 new infrastructure projects planned
- 13:07 ”Planning laws need reforms” Osborne
- 13:09 Osborne wants to “cut the burden of Health & Safety on small firms”
- 13:11 50% income tax relief on loans up to £100k to qualifying small businesses
- 13:12 Business rates holiday extended to April 2013
- 13:17 Planned fuel duty increase in January 2012 scrapped
- 13:18 Fuel duty increase planned for August 2012 reduced to 3p
- 13:19 Coalition government to take Britain “Safely through the storm”
- 13:19 George Osborne sits down and Ed Balls takes the stand
- 13:20 Ed Balls states “Plan A has failed”
If you need further clarification, please do not hesitate to contact us.