To an outside observer, the SME agenda may seem noticeably absent from this year’s Autumn Statement. But read through the details of Osborne’s statement and we find that actually there are a range of measures that will directly impact the small business owner.
Although the Government may see the Commissioner and the Small Business Conciliation Service as its crowning achievements, their broader agenda on devolution, infrastructure and empowerment of the regions could go some way to transforming SME experiences of the UK business environment.
Good news for rural SMEs
A key feature of Osborne’s Statement was the commitment to create 26 new enterprise zones, which will include the expansion of eight existing zones. Crucially, 15 of these zones will be in smaller towns and rural areas like Ipswich and Carlisle. This is all part of a commitment to a £12 billion local growth fund, enabling businesses to flourish regardless of geography. While many large businesses tend to be focused in large metropolitan centres, small businesses are often rooted in local communities, so this announcement will be a real boon for small businesses across the country.
Funding for labourers through infrastructure
A promising development for SMEs in the construction and manufacturing industries was the Government’s commitment to invest over £100 billion into UK infrastructure. With such huge spending there will no doubt be a weighted increase in demand for SMEs with the right skills. Whether directly or indirectly, spending on infrastructure will have a positive impact on all SMEs in the UK, creating jobs outside of the cities and boosting growth.
Deeper devolution could go either way
Osborne also spoke on the topic of devolution, reiterating the point made in the last Budget that autonomy over business rates will be given to local authorities and mayors in major cities like Manchester. This means that many SMEs may pay lower rates, but there’s also nothing stopping local authorities from raising rates too in less fortuitous times. Fortunately, 600,000 start-ups will continue to receive business rate tax relief for another year, giving our very smallest businesses certainty about their outgoings as they create their business plans for 2016.
It was also fantastic to see the Government moving to give credit rating agencies the ability to share SMEs’ credit information from designated ‘big banks’ to all other financial providers as part of their efforts to stimulate lending and increase competition in the SME credit market.
Finally, I welcome the news that SMEs will be exempt from the Government’s 0.5% apprenticeship levy, enabling small business owners to hire new talent to help their business thrive without the financial pressures imposed on larger firms. This will be welcome news, since more than one in ten SMEs report a shortage of skilled staff.
Our most recent SME Confidence Tracker cited increased competition and a lack of demand as the greatest challenges to businesses, both of which the Autumn Statement touched on briefly. But with SME optimism at a record low, the Government has to provide as much ‘forward guidance’ as possible so that confidence levels and SMEs’ prospects for growth rebound in 2016.
The seeds sown in this Autumn Statement are perhaps the most important of this Parliament as the Chancellor seeks to balance the books. From the look of things, he is trying to create the space and support for SMEs to help his ambitions.