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Gloucestershire Business News

REACTION: What will the Autumn Statement mean for Gloucestershire?

Following yesterday's Autumn Statement, Punchline-Gloucester.com approached business leaders in Gloucestershire and beyond for their reaction, in association with Hazlewoods.

Acknowledging that the UK was in recession, Chancellor Jeremy Hunt outlined plans to save tens of billions of pounds, announcing £25bn in tax rises. He announced a freeze on income tax thresholds, meaning millions of people will pay more in tax as their wages rise.

Help with energy bills will be cut back but the state pension, benefits and tax credits will rise in line with inflation. And the National Living Wage will increase from £9.50 an hour for over-23s to £10.42 from April.

Ruth Dooley, a partner at Cheltenham-based Hazlewoods LLP and chair of GFirst LEP, said: "There were a couple of items that may have a significant impact on future growth in Gloucestershire. The first was that the second round of the Levelling Up Fund will stay in place and £1.7 billion will be allocated to local infrastructure bids. Bids are currently in from Stroud, Cheltenham and Gloucester local authorities and we will know before the end of the year if they have been successful.

"The second point I picked up was that rather than pursuing Investment Zones, the Government plans to identify and support high-potential knowledge-intensive growth clusters. Hopefully this is an opportunity to create a cyber super-cluster of businesses in Gloucestershire and beyond in the Western Gateway region."

Dev Chakraborty, deputy chief executive of GFirst LEP, said: "After a chaotic few months, businesses are looking for stability, clarity of taxation and thereafter the ability to budget and plan for future years.

"Unemployment will undoubtedly rise across the UK, but Gloucestershire will hopefully do better than other areas due to the fact that we have strength in multiple business sectors.

"The devil will be in the detail in the coming days and weeks...when will we see the next round of infrastructure funding, how much will fuel duty rise, what funding will Growth Hubs receive etc. Challenging times for all though."

Sam Holliday, Federation of Small Businesses development manager for Gloucestershire, said: "After the chaos and economic meltdown that followed the previous Mini Budget, this latest Government Autumn Statement at least felt a bit more sensible and straightforward.

"In saying that, however, there is still something of a disappointment that the Chancellor didn't seem to acknowledge the pain that so many small businesses in Gloucestershire and beyond are going through. 

"The biggest problem businesses face, of course, is rising costs so it was at least encouraging to see the Chancellor maintain the energy support package for businesses until April. He also said they would review by the end of the year what happens after April and this is the really crucial part - energy costs are going to be high for a long time so a short-term answer for business is simply not enough. 

"The news of £14bn help with the business rates revaluation was also to be welcomed but beyond these positives there were a few more challenging announcements to deal with. It meant we were left with the sense that this was a rather 'neutral' statement and one that won't really reassure - let alone inspire - many small businesses in the county ahead of a testing winter period." 

Matt Griffith, director of policy at Business West, said: "This was a difficult budget for difficult times. Although there was less immediate pain than expected, the Chancellor set out rising taxes and pressure on public spending in the medium term, often by freezing many thresholds below record inflation, meaning the growth path for businesses and the UK may be long, rocky, and protracted.

"The statement brings us back from the brink of the sharp rises in interest rates and damage to confidence we saw from the mini budget. The sombre tone of both the Chancellor and the backbenches reflected this.

"There were also small glimmers of light in slightly better projections for growth from the OBR compared to the Bank of England. This, and a change to the government's fiscal rules, means that the government avoids what would have been a damaging return to budget consolidation in the middle of a recession. However, many of the hard choices were postponed, not avoided.

"Looking specifically at taxes and spending that directly affects businesses, the research and development scheme for smaller businesses has been cut which will impact many firms in investing in new innovation at a time where stability is needed.

"Revaluation of properties for business rates will proceed next year as scheduled, with some support to prevent big jumps in bills.

"Disappointingly, there was almost no mention of our region in plans for specifically targeted boosts to local growth.

"However, after several years of political turbulence and changing government business and economic strategies, there is now a need for a return to seriousness and stability in how government plans and delivers its economic plan. We cannot afford optimism of a future return to growth to be forfeited by more lost opportunities to deliver the changes and confidence business needs."

Steve Gardner-Collins, director and chair of Visit Gloucestershire, said: "Sadly, tourism and the visitor economy didn't feature at all in the Chancellor's statement, and are hardly referenced in the Treasury Red Book, the confirmation that the decision to reverse the VAT-free shopping policy previously announced will be maintained.

"For tourism the national picture is funded with DCMS's budget actually goes up from £1.6bn to £2.0bn next year but back down to £1.6bn for the next two years after that which does not augur well for the national tourism marketing spend.

"The Chancellor announced a package of targeted support which he says will help business with rates to the tune of £13.6bn over the next five years, and in particular hospitality and leisure along with retail are highlighted for support. Sadly the Chancellor did not U-turn on his U-turn with regard to VAT-free shopping for international visitors. He would have been well-advised to do so considering the research published this week by the Association of International Retail (AIR) and Oxford Economics.

"In all, the hospitality, tourism and visitor economy sector business remain deflated and unsupported and the future for many will remain uncertain."

Dale Vince, founder of Ecotricity, said: "Windfall tax plans will raise £14bn - a drop in the ocean of the £170bn that Treasury forecast the oil and gas sectors will make in windfall profits this crisis.

"No consistency between oil and gas sector windfall tax and renewable generators...no mention of onshore wind or of Truss's solar ban. Energy bill support continues to be UN targeted - it's also regressive, the more energy you use (which correlates tightly to wealth) the more cash the government gives you. It should be targeted to those who need it and restricted to the first 3k units. Would slash the cost. And make it progressive.

"Seven per cent rise in rents for the social housing sector is good news for tenants, bad news for social landlords - why is there no cap for private landlords and protection for private tenants? Agregious disparity, punishing social landlords in effect by creating a vast discrepancy to the private sector, which most people rent from."

Angharad Trueman, managing director of Cheltenham-based CGT Lettings, said: "Of course, Chancellor Jeremy Hunt's Autumn Budget 2022 would affect the property world. For me, one of the biggest changes is the halving of capital gains tax relief. This means that from 2023, the annual exempt amount for capital gains tax will be cut from £12,300 to £6,000, and then cut again to £3,000 from April 2024. This is bad news for landlords, second homeowners and those looking to sell their property as capital gains tax is applied at a much higher rate for residential property sales.

"Another area that could hit landlords' pockets is the cut in dividend allowance. This will change from £2,000 to £1,000 in 2023, and then drop further to £500 in April 2024. Many landlords who own properties in Ltd companies and pay themselves in dividends could see their income reduced.

"The stamp duty cut announced by Kwasi Kwarteng will remain for a limited time, as the OBR expects housing activity to slow over the next two years. The threshold before stamp duty is paid will stay at £250,000, up from the previous threshold of £125,000 - but now for a time limited period until March 2025.

"All in all, we expected a hit within property and the measures he has announced are in line with this."

READ MORE:

Business rates burden on warehousing sector branded 'unfair' 

Planned fuel duty increase 'will stifle economy' 

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