Autumn Statement Blues
- 30 Nov
George Osborne's Autumn Statement served up few surprises and gave professionals and business owners alike very little to be cheery about. We asked a selection of our clients what they thought about what Mr Osborne had to say.
Martin Pollins, Managing Director of Bizezia, said that the Chancellor has a difficult job and has to deal with many influences from the Eurozone as well as prevailing corporate greed.
"I was glad to hear that the Government is doing all that it can to ensure Britain can pay its way," said Martin. "I don't think the Chancellor has got it right but, to be fair, our economy is in such a state that perhaps nobody could do anything better."
Kieron Robertson, Chartered Financial Planner with Valiant Financial Consultants added: "There were no real surprises, just a continued theme of encouraging (small) business investment and growth."
Added Bob Pitman, Managing Director, Priory Business Group PLC: "Though I cannot honestly say I have seen anything in it for ‘us', I would imagine that some of the initiatives to help smaller business could bear fruit and I really hope they do for everyone's sake."
Neil Edwards, Managing Director of The Marketing Eye said that there was little for the South East and too much of a focus on new businesses, rather than established businesses.
He was ‘encouraged' by the new Seed Enterprise Investment Scheme, but added that it was focused, once again, on new businesses.
"Surely the jobs are going to be created in the established businesses - businesses that only need a little bit of help and investment to encourage them to take the next step - not risky new enterprises," Neil said. "Small businesses don't want debt and a repayment burden at this time, they need customers, reduced overheads and the prospect of investment if and when it's needed."
He also commented on the launch of the National Loan Guarantee Scheme.
"What troubles me is that the availability of term debt isn't the issue for small businesses. Such facilities are needed (and granted) for expansion, not survival," he said. "The real area that needs focus is short term debt."
Mike Norrie, Director of Castle Corporate Finance liked the notion of the Business Finance Partnership and the Seed Enterprise Investment Scheme.
"Both could be a wonderful help so long as they are packaged in an accessible manner," he said. "Ideally they will be adopted by existing channels of funding (Business Growth Fund, Venture Capital Trusts and so on) rather than through new quango agencies, but it is important such initiatives are not strangled by red tape at birth."
Richard Holme, Partner with Creaseys said that while the Chancellor's speech had little in the way of announcement of tax changes, there was interest in the Seed Enterprise Investment Scheme (SEIS). He explained that this might, from 6 April 2012, give 50% income tax relief on investments of up to £100,000 (quite small beer though as it seems each company can only raise £150,000 in this way).
Mike Norrie said that the way ahead is to boost the private sector.
"If that gets moving, employment and tax collections rise, thus accelerating sovereign debt reduction. Job done," he explained.
He added that while initiatives have been put in place - such as the National Loan Guarantee Scheme - the question remains are banks going to lend?
"Like taking the thirsty horse to water, will these measures result in banks lending more to small business?" Mike said. "No, not until the banks have recovered an appetite to take risks. That is unlikely all the time the media is crying out to punish them as the scapegoats for all that has gone wrong."
There was a general consensus that the media is only adding to the general doom and gloom in the country.
"I must admit to being relatively unsurprised by the pretty grim news all round and, at the same time, somewhat disenchanted by the plans to improve things," said Bob Pitman. "Perhaps this is just the cumulative effect of being continuously drip fed such news on a daily basis."
Mike Norrie concluded by saying that UK Plc needs a ‘feel good factor'.
"Perhaps Her Majesty's Diamond Jubilee and the Olympic Games will deliver in the New Year?," he said. "In the meantime let's have a gagging order on the media gloom and doom."