Autumn Statement 2014: Some good news for business, but still a way to go
9th December 2014

In a series of highly political tactics designed to woo voters before next year’s General Election, the Chancellor of the Exchequer George Osborne used this year’s Autumn Statement last week to announce a range of headline-grabbing crowd pleasers on issues such as personal allowances, home buying, air passenger duty and even a trip to Mars.
 
The Chancellor’s upbeat assessment of the UK’s economic performance included new forecasts from the Office for Budget Responsibility, with short-term growth in 2014 revised upwards to 3% from 2.7%, and for 2015 to 2.4% from 2.3%.  Britain is on course to be the fastest-growing G7 economy this year, and those headlines received a warm welcome from many window businesses.
 
However, the Autumn Statement fell short in delivering on some of the key areas that will help the joinery industry to grow sustainably, the British Woodworking Federation (BWF) has warned.
 
Measures to support small and medium sized businesses included a promise of extra bank lending, support for VC-backed funds investing in SMEs and better information on finance schemes. Many firms welcomed the freeze in fuel duty, the annual increase of business rates capped at 2% and a doubling of the Small Business Rate Relief to April 2016. There was also a 230% increase in R&D tax credits for SMEs, and the long-awaited promise to review Business Rates.
 
Iain McIlwee, chief executive of the BWF, commented:
 
“Operating within the constraints of the deficit, the Chancellor managed to deliver some good news for business in this year’s Autumn Statement.  We wanted to see a review of Business Rates and that is now on the table. We wanted tangible support for investment, so the announcements on capital allowances are welcome.  The commitment to better communication to businesses of the funding options available to them also will be useful.
 
“However, our residual concern is that the Government is not going far enough to get to grips with the deficit, and this perpetuates uncertainty. The dark warnings that have followed the Autumn Statement about the likely severity and real impact of future cuts will also dampen confidence just at the time when we should be investing for the year ahead.”
 
The BWF has lobbied for years for a stronger, less volatile housing market, and housing certainly stole the limelight in the Autumn Statement this year with the Chancellor’s surprise reforms to Stamp Duty. “Those Stamp Duty changes should help to add fluidity to the market and help people to find some extra reserves to invest in their new home,” said Iain McIlwee.
 
However, he expressed concern about a lack of detail in the potentially more significant announcements that the Government would extend its investment in affordable housing as well as increase support for new private housing development.
 
Iain McIlwee said:
 
“The UK’s construction sector is a critical driver for growth, but it’s not just about big infrastructure projects. New house building and the domestic repair, maintenance and improvement market are also vital and our industry represents a large part of that. Joinery and woodworking is the third largest sector of employment in construction with over 5,070 firms turning over an estimated £3.8 billion. Any new house building initiatives are highly important factors in the economic success and growth of our industry.
 
“The BWF members feel that policy on housing is still too vague.  We were intrigued by Danny Alexander’s comments the day before on direct intervention by Government and disappointed that the Chancellor didn't build on them.  More positive action is needed - we need ‘Government will…’ rather than ‘If you don’t we might…’”.
 
The other area of particular interest to the BWF was the Government’s announcements on how it would help to address the increasingly urgent and serious skills gap. The Chancellor pledged to abolish national insurance contributions for apprentices under 25, as well as provide improved careers advice for young people and more back-to-work support for older workers to train and re-skill.
 
Dave Campbell, manager of the Woodworking Industry Training Forum (WITForum), the training arm of the BWF, also expressed his concerns that these steps would not be enough:
 
“We are deeply concerned about the flow of young people into the construction sector. The skills shortage is constraining demand and we wanted to hear some reassurance that tried and tested methods of bringing in new entrants into construction are not going to be compromised by reinventing the wheel to suit other sectors.
 
“The announcement on the removal of employer national insurance contributions for apprentices will certainly help make a stronger case to take on apprentices. But that’s assuming it is not more than offset by changes proposed through the Richards Review and Vince Cable’s recent announcements on increasing apprentice wage rates. Things are moving in the right direction, but more focus on skills is essential to deliver more sustained growth and prosperity across the country.”
 
All eyes will now be on George Osborne’s one crucial performance left before the nation goes to the polls next May, the 2015 budget. The BWF has confirmed that it will continue to lobby vigorously for the initiatives outlined in its Manifesto.