NEWS
Autumn statement: Great for small business, not so much for skills
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fter a summer of uncertainty and speculation, a new Prime Minister and a new endgame of leaving the EU, the Chancellor’s Autumn statement is the first real indicator of what the country can expect moving forward. In a move that some describe as a ‘showpiece’ statement, Chancellor Philip Hammond has reinforced the current cabinet’s strategy of strong- decision making, starting close to home by replacing the future Autumn Statement with the Budget, and making the March Statement a much smaller scale event.
Mr Hammond said: “No other major economy makes hundreds of tax changes twice a year, and neither should we.”
Small business was at the heart of the Autumn Statement with corporation tax being reduced from 20% to 17% by 2020, and £400m being invested through the British Business Bank in innovative small businesses with potential for growth, providing the finance that they need to expand. Fuel duty will also remain frozen.
On the other hand, the National Living Wage and the National Minimum Wage will increase from April 2017. The National Living Wage for those aged 25 and over will increase from £7.20 per hour to £7.50 per hour, and the National Minimum Wage will increase by up to 10 pence per hour. In addition, £4.3m will be spent on helping small businesses to understand the rules and cracking down on
employers who are breaking the law by not paying the minimum wage.
The biggest news for industry in general is the new National Productivity Investment Fund (NPIF), which is to provide £23bn of additional spending with a view to ensuring the UK’s economy is fit for the future. The fund will provide major additional spending in areas that are key to boosting productivity – transport, digital communications, research and development (R&D), and housing. £2bn more per year is to be invested in research and development funding by 2020- 21. This represents a major increase in research and development funding for universities and businesses with R&D projects to help the UK remain an attractive place for businesses to invest in innovative research.
£2.3bn is to be put into a new Housing Infrastructure Fund which will be used for projects such as roads and water connections to support the construction of up to 100,000 new homes. On top of that, £1.4bn will be used to provide 40,000 new affordable homes and another £1.7bn will be used to speed up the construction of new homes on public sector land.
Scotland, Wales and Northern Ireland will receive more money which can be spent on infrastructure projects, with each devolved administration deciding where this will be spent. This will be an increase of over £800mn for the Scottish Government, over
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£400m for the Welsh Government and over £250m for the Northern Ireland Executive.
Julia Evans, BSRIA chief executive, said: “ BSRIA is pleased that the Chancellor has promised more affordable housing to assist with the ‘shocking housing shortage’. Helping to meet the need for housing is one of the ‘quick-start’ infrastructure schemes BSRIA has been calling for throughout 2016.
“The Chancellor’s strong emphasis on the development needs of our cities, regions and nations is a confident and helpful step that sends out the right message for members and the industry based at all points across the country.” Dr Colin Brown, director of engineering at the Institution of Mechanical Engineers, said that the “announcement of additional spending for transport, technology, energy and infrastructure, leaves one crucial part of the puzzle out: skills. All this funding, without the skilled people to deliver these projects, is like funding an empty shed. Government wants home-grown talent to deliver R&D, driverless cars and new infrastructure, but we just don’t have the sufficient engineers to deliver this. We have a shortage of key skills today and no clear plan on how to develop a skills pipeline for tomorrow. Government must face facts and outline a clear strategy to ensure the UK has the skills it needs for the economy to thrive.”
Dr Brown also commented: “Major infrastructure projects are being developed in isolation which still focus on how journeys are made, and not on the ‘why’ or ‘when’. We suggest that Government departments collaboratively develop a strategy to incentivise and support an integrated approach that would better serve passengers, providing a resilient infrastructure which is cost effective, efficient and reliable encouraging modal shift towards modes that better protect the environment.” The Building Engineering Services Association (BESA) welcomed the announcement of a new ‘pipeline’ of projects through the government’s planning framework. It also applauded the focus on improving productivity.
“The focus on growth and infrastructure spending is very welcome and in order to be able to deliver proposed workload this needs to be accompanied by very specific investment in skills and research and development,” said BESA chief executive Paul McLaughlin. “The Chancellor is right to identify productivity as a priority and that means we need a truly diverse and multi-skilled workforce delivering projects to a very high standard.
4 December 2016
www.acr-news.com
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