Autumn Statement 2023: Bristol business reaction

November 22, 2023

Bristol business figures have reacted to Chancellor Jeremy Hunt’s Autumn Statement. 

Albert Goodman chartered accountants’ Bristol-based tax specialist Sam Wood, pictured, said reducing the SME R&D intensity ratio requirement from 40% to 30% may help benefit a further 5,000 SMEs access cash credits.

“This is a somewhat positive step for start-ups and smaller businesses in helping them access finance, but the rate of tax relief is still lower than businesses will be traditionally used to,” said Sam.

“Removing third-party bank-details from being included on R&D tax claims further cement an approach that aims to stamp out opportunist spurious R&D tax advisors.

“To curtail error and fraud within R&D tax claims, HMRC must ensure that its compliance plan is appropriately and fairly delivered so as not to put off genuine innovators.

“A volume-compliance approach undertaken by an under-resourced and ill-equipped task force needs to be updated so that properly trained and experienced HMRC inspectors adopt a more targeted and collaborative approach to ensuring claims are accurate.

Following the success of innovation centres like those championed in Bristol, it is encouraging to see an additional £500m being set aside to fund further innovation centres in the UK.”

Peter Edgar, CFO at Bristol eCommerce success story Huboo, which employs more than 600 people in a network of depots in the UK and Europe, said while the living wage boost would help the lowest paid in the very short term, increasing the living wage at a time when AI and automation were already disrupting how businesses think about hiring felt like a misstep.

“These technologies have fantastic potential to empower human workers and make us all more productive, but if we make the basic cost of labour too expensive, businesses may simply decide to dispense with the humans altogether,” he added.

“Given that entry level roles could be most at risk from greater business use of AI, the government’s decision to increase the living wage for the youngest workers could further disincentive employers to take chances on people at the start of their careers.”

He said the government needed to address the UK’s ailing productivity by enhancing business use of technology and championing long-term skills development. 

“Further investment in AI innovation centres is most welcome, as is the government’s continued commitment to full capital expensing for businesses looking to invest in IT, machinery and equipment,” he said.

“But while the Chancellor has committed money towards new apprenticeship pilot schemes that could, over time, stimulate more training, he has missed an open goal around skills development.

“Increasing the Apprenticeship Levy would create an immediate incentive for firms to invest in workforce skills and lay a clearer pathway towards higher-paying jobs, especially for lower-income households. “As it is, today’s Statement adds to the overall corporate wage bill without necessarily boosting either employee productivity or performance.”

David Williams, senior office partner at global accountancy group KPMG in the South West, pictured, welcomed a number of the business measures.

“The £2bn and £975m announced for automotive and aerospace manufacturing respectively could go a long way to shoring up these sectors in the South West, helping them continue to expand and mitigate ongoing challenges such as talent recruitment and retention,” he said.

“And, as a major provider of local jobs and having struggled since the pandemic, the region’s hospitality industry will welcome the news that the Chancellor will extend the 75% business rates discount for hospitality, retail and leisure businesses.”

“Plans to launch a new scheme that will train the next generation of science and technology venture capitalists, as announced in the Autumn Statement text, should come as positive news for the South West’s broad range of innovators.

“The region is home to some of the UK’s foremost research and development specialists and academic institutions, so we have no shortage of expertise and bold ideas. The challenge for our innovators has been securing the investment they need to help scale their concepts, so the Chancellor’s plans to respond to these needs will be welcomed.”

The measures on AI (artificial intelligence) were welcomed by Tom Whittaker, a senior associate at Bristol-headquartered national law firm Burges Salmon who specialises in data and tech issues.

Tom, pictured, said: “The government recognises much of what industry has been calling for – investment, access to capital, access to computing capability.

“These announcements will be well received, coming shortly after the AI Safety Summit at Bletchley Park and industry investments in the UK, with notable AI and tech companies choosing to locate here.”

However, industry was still calling for more, he said, including changes to investment schemes, changes to visa systems to attract more global talent, and improving technology education at all levels.

“Connected to the Statement, there remains a split about whether the UK is taking the right approach with AI regulation,” he added.

“Some argue that the UK is doing too little, too slowly and that the EU’s proposed AI laws will set the standards in this field.

“Others argue that the UK is taking the right approach, utilising existing regulators and regulations without burdensome new legislation.”

Samuel Gee, founder and director of Bristol-based financial planning and mortgage advisers Manning Gee Investments described the 8.5% commitment to the Triple Lock as an encouraging outcome for pensioners which would deliver one of the most significant cash increases to the state pension.

“For those receiving the full State pension, this translates to a substantial rise of over £900, offering a crucial lifeline to individuals heavily reliant on it for critical living costs,” he said.

“In tandem, the 9.8% increase in the Minimum Wage, now standing at £11.44 per hour, marks a positive stride for low earners.

“The extension of this increment to individuals aged 21 and 22 recognises the essential living expenses faced by those in this age bracket who would typically earn less while performing the same job.

“Coupled with adjustments to the benefit system, these changes reflect a significant shift towards inclusivity in the workforce, aligning with the Chancellor’s vision to “make work pay”.”

He also said the reduction in National Insurance contributions for the self-employed was a substantial boost for those fundamental to the economy’s backbone.

“This move underscores the government’s dedication to supporting active contributors to overall economic growth, and the reduction of NI for employees means an extra £37.50 per month of net pay for someone on a salary of £35,000,” added Samuel, pictured.

However, while there were positive developments for pensioners and the self-employed, he said concerns arose regarding the allocation of resources, particularly for small businesses heavily dependent on their workforce.

“The notable tax loophole for large firms with ability to invest, coupled with a relatively modest measure for the self-employed, raises questions about the balance of support across sectors,” he added.

“The impact on small businesses, especially those with substantial staff-related expenses like hospitality and smaller retail businesses appears to have been overlooked.

“This lack of explicit support disproportionately affects smaller companies with precarious cash flow, despite their valuable contributions to the overall economy.”


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