Autumn statement reaction: Confirmation of enterprise zones is welcome news
Good news for Lancashire in the chancellor’s autumn statement is the confirmation of an enterprise zone for Lancashire. Although not mentioned by name in the autumn statement, these are expected to be both the Warton and Samlesbury sites. The zones will give tax breaks through capital expenditure and other incentives to encourage businesses to locate in these areas.
David Bennett, a tax partner at Lancashire and Cumbria accountants and business advisors Moore and Smalley, commented: “Confirmation of these enterprise zones for the BAE sites is welcome because they will act as an economic stimulus.”
David Bennett also believes the chancellor’s continuing focus on keeping interest rates low will benefit SMEs. He said: “There will be no tax cuts, but if interest rates are kept low this will have a cost-saving effect for businesses.”
Another positive among Mr Osborne’s statement is the announcement of a £20bn National Loan Guarantee Scheme that will see the government underwriting bank lending to smaller businesses.
David Bennett said: “This will enable the banks to be confident about lending to businesses with turnover of £50m or less, and this should reduce the cost of borrowing for smaller and mid-sized businesses.
“A new Seed Enterprise Investment Scheme was also announced, which is designed to help new business start-ups by giving investors a tax break of up to 50 per cent. Details of qualifying businesses will be announced next week and this information will be worth looking out for.”
In addition, the government has published its national infrastructure plan detailing 500 road, rail and digital infrastructure projects over the next 10 years.
David Bennett commented: “Capital investment is always welcome but it will take some time to filter through.”
On the negative side, the chancellor confirmed that the government’s debt reduction programme will take two years longer to achieve than originally anticipated. But it is hoped that it will not affect global market confidence in the UK economy or hit the chancellor’s low interest rates strategy.
David Bennett added: “Although there were reports that we were heading for a double dip recession, the forecasts today announced by the Office of Budget Responsibility (OBR) do indicate some level of growth albeit at a moderate level.
“It will continue to be challenging times in the next twelve months but there are still opportunities. However, it is vital that owners have the right financial systems in place and management information to help them take their business forward.”