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What can we expect in the Chancellor’s autumn statement?

What can we expect in the Chancellor’s autumn statement?

25th November 2011

Email: richard.maynard@newburynews.co.uk

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By Chris Davies, of Ross Brooke accountants

A lot is expected from the Chancellor’s Autumn Statement. Continuing negative economic news has piled pressure on the Government to act swiftly and decisively and we await anxiously news of how the Chancellor proposes to boost growth.
In the meantime, my colleagues and I have identified some areas that we believe may be on the Chancellor’s task list.
It is expected that we will see announcements on banking reform, as well as a way to secure the future for energy intensive sectors, and an update on the second phase of the Growth Review, which is assessing policy that is holding back growth of investment and hiring by businesses.
He is also expected to explain his plans for Credit Easing and exactly how it will help businesses.
The Chancellor could take steps to help first-time buyers, and in turn this would help the beleaguered construction industry. A recent statement from the CBI called for more investment in infrastructure, including road and rail links and power generation, so this too may be an area to watch.
Commenting on the importance of the Autumn Statement for growth, the chief executive of the manufacturer's organisation EEF said: “This autumn, the Government must get its growth plan back on track. Manufacturers are looking to invest but they need to see Government take the right decisions on issues such as boosting competition in the banking sector, reducing employment regulation and addressing the cost of fighting climate change.
“They also need to hear how Government plans to transform the business environment by the end of this Parliament. But timely and targeted measures are required now to boost investment and growth. Last year, the biggest threat to growth came from our fiscal deficit. Today the biggest threat to reducing that deficit comes from weak growth. Failure to act now will only make the future challenges even bigger and risks undermining our hard-won fiscal credibility.”
Specific measures that EEF is calling for include:
n The introduction of 100 per cent first year capital allowances for a time limited period of two years.
n Reform of the R&D Tax credit to make it more effective at boosting investment and creating high value jobs.
n The extension of the Business Growth Fund for companies between £5m and £50m to cover debt as well as equity.
n Reversing the rise in employment regulation by rethinking proposals on Equal Pay Audits, Employment Tribunal fines and keeping new proposals on parental leave and flexible working simple.
n Helping companies to invest in apprenticeships by urgently clarifying their legal status.
Meanwhile the Federation of Small Businesses has called for the Chancellor to announce targeted VAT cuts and an NIC holiday, to help smaller businesses to boost growth.
There is certainly plenty for the Chancellor to think about and all will be revealed on  November 29. Please check our website for more information and updates on the day. If you would like to discuss the implications of these proposals Chris Davies can be reached   on (01635) 555666 or email cdavies@ross-brooke.co.uk