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George Osborne's Autumn Statement
9:52am Wednesday 5th December 2012 in News
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Roberta Blackman-Woods, MP for the City of Durham: "The Chancellor has again proved that we are not all on this together. The further cuts he announced will hit the North-East hardest, he clearly has no idea the struggle people are facing and I will be lobbying the Chancellor hard to make sure that the cuts in civil service jobs are not applied to Durham and the surrounding area."
Alex Cunningham, MP for Stockton North:
"There was little in this statement to help Teesside or even the economy as a whole which the Chancellor conceded is shrinking and will see little growth over the next several years."
Andy Preston of Middlesbrough-based Green Lane Capital:
"I applaud the government’s decision to change pension tax relief with the Lifetime Allowance set to fall to £1.25m and Annual Allowance falling to £40,000 – and I say that as a high earner. As it stands, the highest earners not only benefit from having the most money, but they then have a tax incentive that matches the tax rate they pay, so if you’re putting £100,000 into your pension, the tax payers chip in £50,000.
"Capping the amount high earners can benefit from tax relief is not only fair, it’s a measure that invests in everyone’s future because it seems that the plan is to plough more money into education. It’s about the rich subsidising everyone’s future education, taking money for the good of the whole community from people who don’t really need it. It’s also a smart political move from the government because they are often criticised for favouring the rich – and yet this is clearly about taking from the rich."
Phil Orford Forum of Private Business chief executive: “A 3p rise in January would have been nothing short of economic vandalism in the current climate,” “In fact it would have been hard to imagine a worse start to 2013 for the UK economy.
“Fuel prices have reached a cliff edge, and the Chancellor has acknowledged this with today’s announcement. He has also clearly heeded the overwhelming objections from small businesses that high fuel prices are hampering their own growth ambitions on a number of levels."
Professor Bernie Callaghan, Dean of the Faculty of Business and Law at the University of Sunderland: “The upgrading of the A1 to Newcastle is a positive for the region, although the effect of the HS2 to Leeds will need to be looked at more closely. Those on benefits will suffer - whether they are in or out of work. And of course the devil of the detail of the further cuts in Public Spending - to be announced in the new year - will inevitably have a negative impact on this region, which is still hugely dependent on Public Sector jobs.”
NECC Director of Policy, Ross Smith: “This is the first budget announcement from the Coalition Government that business in the North-East can really get behind. The Chancellor has clearly listened to many of the regional priorities we asked him to address, on behalf of NECC members."
Ian Miller, director at Stockton-based Erimus Insurance Brokers: "The cancellation of the 3p fuel duty increase will provide welcome relief to a lot of our customers in the North- East. The increase in capital allowances will hopefully encourage businesses to increase their capital expenditure which in turn will drive growth in the region.
"Whilst it is important for the Government to reduce the budget deficit, it is good to see that they are looking to provide £1 billion investment in infrastructure projects, including works on the A1 in the North-East. This will hopefully create more jobs within the region."
Shadow Chancellor Ed Balls on the Government: "Unfair, incompetent and completely out of touch."
David Hammal, PwC: Some more detail on North East measures - £64 million upgrade on the A1 at Lobley Hill, Gateshead; £61 million to build over 3,300 new homes for affordable rent; £17 million to return over 1500 empty homes to use in the North East and Yorkshire; Business support measures will benefit 130,000 small and medium enterprises in the North East.
Paul Dixon, PwC: George has announced a package of increases in personal tax reliefs which togteher with no further fuel tax rises and a council tax freeze will offer some comfort to all tax payers. A 2.5% increase in the basic state pension will be welcomed. Targeted tax increases have been limited to pension allowances with a fall in both the lifetime and annual allowances. Benefit cuts are aimed at raising £3.7 billion in 2015/16.
David Hammal, PwC: Well, that was slightly more positive for business than expected! George continues to try to encourage investment into the UK by having the lowest corporation tax rate amongst our competitors. Enhanced capital allowances for small capital spend will help many local businesses. Cancellation of 3p fuel duty rise good for local businesses. Finally, continuation of business rate relief will be help our small businesspeople.
Paul Dixon, PwC: Personal tax allowance - £9,440 by 6 April 2013 - you can earn this before paying any tax
Paul Dixon, PwC: Council tax freeze for further year. Fuel duties - 3p duty rise in January - cancelled altogether - good news for almost everyone!
David Hammal, PwC: Main corporation tax rate reduced by a further 1% - 21% by 1 April 2014 - encouraging investment in the UK.
David Hammal, PwC: Increase in capital allowances - first £250,000 capital expenditure will qualify for 100% tax relief (up from £25,000)
David Hammal, PwC: Business tax cuts - extending small firm business rates relief for a further year; tax incentives for shale gas exploitation; empty property relief for rates.
David Hammal, PwC: Support for exporting businesses - increasing UKTI funding by 25%
Paul Dixon, PwC: Increase in CGT annual exemption in line with the income tax increases. Small increase in Inheritance Tax exempt amount
Paul Dixon, PwC: Increase in 40% income tax threshold - 1% in 2014/15 and 1% in 2015/16
David Hammal, PwC: 1% increase in welfare payments - in line with Public Sector pay rises
Paul Dixon, PwC: George announces that ISA limit will increase to £11,300 and AIM stocks will now be able to be held directly.
David Hammal, PwC: State pension to increase by 2.5% in 2013
Paul Dixon, PwC: George announces changes to pension tax relief with the Lifetime Allowance falling to £1.25 million and Annual Allowance falling to £40,000 from 6 April 2014.
Paul Dixon, PwC: George says tax revenues following the first year of 50% fell £7 billion.
David Hammal, PwC: George comments on the endeavours to clamp down on tax evasion and aggressive avoidance. 2,500 extra inspectors to challenge evasion and avoidance. Introduction of General Anti-Abuse Rule to prevent the most aggressive tax avoidance.
Paul Dixon, PwC: George says he expects £5 billion from the next 6 years under the UK/Swiss tax agreement from undisclosed Swiss bank accounts for UK residents.
Paul Dixon, PwC: Announcement in respect of infrastructure projects include 120,000 new homes, £600 million for scientific research and a replacement for PFI.
David Hammal, PwC: Confirmation of upgrade of A1 to motorway standard from London to Newcastle - good news for the North East.
Paul Dixon, PwC: £5 billion of departmental public sector savings to be reinvested in capital infrastructure projects.
David Hammal, PwC: Attempting to cut public sector spending through back office efficiencies, use of digital services and rationalisation of property portfolio
Paul Dixon, PwC: George says he is going to bring sanity to public finances without affecting the quality of public services.
David Hammal, PwC: George confirms that Autumn Statement is fiscally neutral - no net giveaway
Paul Dixon, PwC: George says no room for relaxation in order to keep the deficit reducing. However he refuses to increase the level of cuts.
Paul Dixon, PwC: George says the deficit down by 25% with further falls expected this year.
David Hammal, PwC: George comments on 1.2 million private jobs created since 2010. Expects to continue to outstrip public sector job losses. Jobless figure to peak at 8.3%
Paul Dixon, PwC: Chancellor indicates growth forecast peaking at 2.3% in 2015 rising to 2.8% in 2018.
David Hammal, PwC: OBR forecast 0.1% contraction in GDP this year. Blamed upon the net export position, not on Government fiscal policy.
David Hammal, PwC: George says he is going to offer incentives for investment - let's see!
Paul Dixon, PwC: Chancellor portrays the UK as a safe haven for international investment
Osborne: "Coalition is confronting the country's problems, not ducking them."
Osborne now on his feet "It is a hard road but we are getting there."
Paul Dixon, PwC: Watch out for potential action on stamp duty, council tax, capital gains tax and pensions.
David Hammal, PwC: Closer to home, what is going to happen with the 3p rise on fuel duty in January? Will he help peoples' personal budgets by deferring or scrapping this rise?
David Hammal, PwC: From a corporation tax perspective, we are not expecting huge changes. There have been many changes introduced recently with a view to making the UK a more attractive place to do business and we feel it unlikely in the current climate that he will do anything to further reduce corporation tax.
NECC Chief Executive, James Ramsbotham: “The region has moved away from the perceived “begging bowl” approach, but if we are to achieve our true potential then we require at least parity with our neighbours and the support from Central Government to help us help the UK.
“The last Budget included very little for the North-East, but we are still growing and increasing employment levels faster than the UK average. I urge the Chancellor to recognise this and in his Autumn Statement provide us with the support we need from central Government to deliver sustainable long-term economic growth and show the rest of the country just what the North-East is capable of.”
Paul Dixon (PwC): The chancellor faces the mother of all balancing acts!
David Hammal: Only a few minutes to go before George stands up to set out his plan for 2013. Given the state of the public finances, we are expecting some significant announcements – hopefully aimed at stimulating more growth. At the end of the day, though, the Statement cannot be a big fiscal stimulus to the economy and hence for every tax cut or expenditure boost, we’ll be looking out for how he is going to pay for them!
Gill Hale, UNISON Regional Secretary: ”With the highest unemployment in the country at 9.8% there is nothing in the Autumn Statement that will address youth unemployment in the region. In areas such as South Tyneside and Middlesbrough, which have some of the most deprived areas in the country, young people are being denied the opportunity of employment. The reality of Cameron and Osborne’s policies will have dire consequences for so many in the region over the coming 12 months and seriously impact on the regional economy.”
Clare Williams, UNISON Regional Convenor: “The damage George Osborne is causing could be permanent for the region’s economy. Within the region, cuts are devastating families and communities, leaving us in an alarmingly poor state. UNISON members are deeply worried that as Christmas approaches their future employment prospects are bleak."
Paul Moore, Managing Director of Darlington-based construction and development specialist Southdale Ltd:
“If Government wants to provide an economic boost, construction and the affordable housing programme is a great place to start. The knock-on effect which spiders out into other parts of the economy, both locally and nationally, means that increased construction activity would have extremely far-reaching effects."
Steve Grant, Managing Director of The TTE Technical Training: “Urgent action is required to ensure that youth unemployment decreases and we do not create a lost generation without the opportunity to realise their talents and without the skills to contribute to the UK economy. This has to be supported by the Chancellor who can ring-fence resources to help create a continual flow of skilled and competent apprentices for employers. "
George Rafferty, Chief Executive of NOF Energy: “After the publishing of the long-anticipated Energy Bill, the Chancellor’s Autumn Statement offers George Osborne the opportunity to show a united front with the Energy Secretary over the Government’s aspiration of achieving a balanced energy future for the UK."
Nigel Mills, chairman of the Entrepreneurs’ Forum: "Chancellor, please put entrepreneurship and those who start businesses first today. They are the ones who will start and grow the businesses to create jobs and taxes for the economy at large.
"Formal mentoring support that matches money with management, support to make businesses investor-ready and raising the annual threshold in the Seed Enterprise Investment Scheme with extended tax breaks would be a great step in encouraging enterprise."
James Ramsbotham, NECC chief executive: “The Autumn Statement must build on the region’s strengths, while focusing on specific measures to address the challenges of stimulating employment and investment by the region’s private sector.
“Businesses in the North-East are rising to the challenge laid down by the huge cuts to the public sector. They are recruiting more people, exporting more goods and have performed admirably during one of the worst recessions in generations. It is now up to the Government to match this effort and support our companies to spearhead the economic recovery."
Ted Salmon, North East Regional Chairman, Federation of Small Businesses, said: “There is no argument that the government had a tough economic backdrop to work with, but small firms in the North-East are still feeling the pressure, so need a clear plan for growth to get them back on track is needed."
Alastair Wilson, tax partner at Tait Walker Chartered Accountants said: “We’re expecting an Autumn Statement which has some bad news for higher earning individuals (in particular on tax relief on pensions) and also a commitment to
challenge what is seen as morally questionable international tax planning by large corporates who have bases in the UK.
“We also know that we will be getting additional details of various measures which have been consulted upon by the Government over the last 12 months.
“Overall we expect the Autumn Statement to be 'revenue raising' for the Treasury, not full of new giveaways or new incentives.”
Ian Malcolm, MD of ElringKlinger (GB) Redcar-based car parts manufacturer: I'd like to see Mr Osborne cut business red tape. There was a commitment from this Government to reduce it but so far no real progress has been seen.
Rob Charlton, chief executive of national design and technology business _space architecture said: “I think the Government has to incentivise enterprise, and this may be achieved through advice and rewards for growth.
“It needs to encourage house building as it can underpin so many
communities which will involve bringing a number of small
businesses into the mix, which will push cash into the local and
wider economy. Any proposals will need to look to the regions
rather than London.”
Paul Dixon: Welcome to the PwC/Northern Echo blog on the Chancellor's autumn statement.
David Hammal: Good morning everyone. A quick introduction from me - I'm a Senior Manager in PwC's Newcastle office. Looking forward to an exciting speech from Mr Osborne as he tries to balance the nation's books.