As part of his Autumn Statement, the Chancellor talked about gloomy economic weather, but said that the Coalition has a plan to change the business climate.
Mr Osborne told MPs that figures from the Office for Budget Responsibility (OBR) has now downgraded its forecast for the UK economy, predicting 0.9% growth this year – compared with 1.7% forecast in March. Looking ahead, Mr Osborne announced that projections of 0.7% growth next year, down from the 2.5% forecast in March.
Key points for business:
- Credit easing programme to underwrite up to £40bn in low-interest loans to small and medium-sized firms.
- £1bn business finance partnership to raise money for medium-sized firms.
- Business rate holiday relief for small firms extended to April 2013.
- Regional Growth regeneration fund to get £1bn in extra funding.
- £250m support package for energy-intensive firms.
- £500m investment for science.
- £1bn “youth contract” to subsidise six-month work placements for 410,000 young people.
UK Aerospace and Defence Organisation (ADS) reacted to the Government’s commitment to national infrastructure projects including airports. Graham Chisnall, managing director at ADS, commented: “A commitment to including airport growth in the planned national infrastructure projects is welcome not only for the aviation sector but the wider business community.”
Mr Chisnall added: “This must go ahead as soon as possible, and involve the industry it will directly affect. It also needs to address the very real concern of providing a working airport structure for the South East. Airport capacity in this region is already over-stretched and we need to be working on a solution now.”
Commenting on today’s Autumn Statement, manufacturers’ organisation EEF’s chief executive, Terry Scuoler, said: “The statement was a targeted attack on barriers to growth with some helpful measures. But these are not normal times. With confidence so low, there are question marks over whether enough funding has been prioritised in the right areas to secure the substantial rise in business investment that it is forecasting for next year.”
Mr Sculoler added: “In the coming weeks and months the government must address two key priorities: the urgent need to increase competition in the banking sector and boost business investment by introducing a temporary rise in capital allowances.”