Autumn statement

THE BUSINESS CONFEDERATION’S VIEW

DIRECTOR GENERAL
JOHN CRIDLAND

The CBI is the UK’s top business lobbying organisation. It aims to influence government policy on a wide range of business matters.

“£5bn on near-term infrastructure, like the tube to Battersea, half a billion a year tax relief for small firms, and £1.5bn extra export support should boost investment and create jobs. The coalition now has everything to prove by delivering. Osborne has stuck to his guns on deficit reduction – avoiding deeper cuts or more borrowing in order to retain credibility.”

THE VIEW FROM CITY HALL

MAYOR OF LONDON
BORIS JOHNSON

Johnson was re-elected to City Hall in May earlier this year. His job is to champion London and represent over 8m Londoners.
“I know the chancellor understands the vital importance of investing in the capital to drive the national economy. Measures that will be of considerable benefit to the capital include: a loan of up to £1bn that will allow London Underground to extend the Northern Line to Battersea (this area offers the greatest potential for new growth and development in the capital since the expansion of Canary Wharf); and £1bn towards supporting the growth of free schools and academies; as well as their confirmation of an extra £1bn spend on roads that will include the upgrade of junction 30 of the M25.
I am pleased to see that the importance of investing in the capital was recognised in several sections of yesterday’s Autumn Statement. Those projects will support our growing population, get people into jobs and help London deliver successfully for itself and for the nation.”

THE AUDITOR’S VIEW

GLOBAL HEAD OF INFRASTRUCTURE AT PWC
RICHARD ABADIE

PwC is recognised as one of the so called “big four” audit firms. It employs around 180,000 people across the world.

“We welcome the additional £5bn allocated to infrastructure investment and the announcement of a loan to kick start the Battersea Northern Line extension. New investment contributes to economic growth and job creation. Some of the other changes such as regarding transparency are welcomed and overdue and nobody can argue against them. Yet the increase in equity required for projects is a surprise as it will likely makes projects more expensive. Maybe the government feels that by buying up to half the equity, they can argue the increased cost is being returned to the taxpayer.”

THE TRADES UNION’S VIEW

GENERAL SECRETARY
BRENDAN BARBER

The Trades Union Congress (TUC) represents 54 affiliated unions. It meets every September to determine the policies it will seek.

“This chancellor has presided over one of the biggest ever squeezes on the budgets of working families. Small gains on fuel and the personal allowance are dwarfed by the swingeing cuts to child benefit and tax credits that many millions of families rely on to get by. The TUC has calculated that the combination of real terms cuts to child benefit, announced in the Autumn Statement and in previous budgets, will leave a household with two children £315 a year worse off by 2015-16. Osborne’s stealth cuts have made the biggest squeeze in living standards since the 1920s even longer and deeper.”

THE CITY ECONOMIST’S VIEW

CHIEF ECONOMIST
TIM MORGAN

City-based Tullet Prebon provides a range of intermediary financial services to market participants, including investment banks.

“As things stand, Britain is going bust. This was the first message that George Osborne didn’t – couldn’t – deliver today. The second, equally-undeliverable verity was that most of Britain’s problems have been self-inflicted. Britain has become obsessed with consumption whilst turning its back on production. In inflation-adjusted terms, manufacturing output declined by about 19 per cent between 1997 and 2007, whilst the real estate (+37 per cent) and finance (+41 per cent) sectors thrived, and there was a 27 per cent real increase in retailing. Where did Britain’s obsessive consumerism come from? To be sure, the advertising industry now spends at least £15bn annually in pushing the gospel of ‘you are what you own’, but this message is surely so vacuous that no sensible person would fall for it. Yes, it did appear that the economy grew (by 27 per cent) over the decade to 2007. But that so called ‘growth’, of £423bn, looks pretty meagre when compared with an £876bn increase in individual and government debt over the same period. ‘A country’, it has been said, ‘is more an idea than a place’. In Britain, ideas need to change – and fast.”

THE OPPOSITION’S VIEW

LABOUR’S SHADOW CHANCELLOR OF THE EXCHEQUER
ED BALLS MP

Balls was chief economic adviser to the Treasury from 1997 to 2004 and economic secretary to the Treasury from 2006 to 2007.

“The £1bn changes to pension tax relief announced today are less than the £1.6bn George Osborne gave back to people earning over £150,000 when he scrapped Labour’s cuts to pension tax help for the highest earners. People on low and middle incomes are being hit hard with higher VAT, the granny tax, and real terms cuts to tax credits, jobseekers allowance, maternity pay and child benefit. Meanwhile Osborne is pressing ahead with a £3bn tax cut for the highest earners in the country – worth an average of £107,000 for 8,000 people earning over £1m.
After two and a half years we can see, and people can feel in the country, the true scale of this government’s economic failure. Our economy this year is contracting. The chancellor has confirmed government borrowing is revised up this, next year and every year. And the national debt is rising, it is not falling. And it is people already struggling to make ends meet – middle and lower income families and pensioners – who are paying the price. In June 2010, the Office for Budget Responsibility forecast our economy would grow by 2.8 per cent this year.
In March of this year, they said there would still be growth, but they revised it down to just 0.8 per cent. Yet the chancellor has not even managed that. Our economy is now forecast to actually contract this year by 0.1
per cent.”

THE DIRECTORS’ VIEW

CHIEF ECONOMIST
GRAEME LEACH

The Institute of Directors has 38,000 members, mainly comprising CEOs and heads of start-up companies. It was founded in 1903.

“This was a tricky job, well done. The chancellor needed to raise business confidence while at the same time keeping the deficit on a downward path. And he largely succeeded, particularly with a surprise reduction in corporation tax. Re-allocating spending from state departments to vital infrastructure projects is just the kickstart the economy needs. And a temporary increase in companies’ allowance for plant and machinery from £25,000 to £250,000 will encourage them to spend some of the cash they are sitting on now, providing a quick economic boost. Osborne is absolutely right to open the door for UK shale gas; and localised school pay is the first step towards much-needed reform in the way public sector pay is controlled. Ideally, we would have wished for further and faster deficit reduction but political reality always made this unlikely. Our key concern is that the OBR’s GDP forecasts will yet again prove too optimistic, with the result that the deficit in the out years will be much higher than forecast.”

THE LEGAL VIEW

PRINCIPAL TAX ASSOCIATE
BEN JONES

Eversheds is one of the world’s largest corporate law firms, with over 40 offices based in the world’s major economic centres.

“While the further drop in the main corporation tax rate is no doubt welcome, what UK businesses really crave is a stable, certain and simple tax system. This does not currently exist in the UK, with the long, complex and constantly changing tax code contributing to a general negative view of the UK tax system, which decreasing corporate tax rates will do little to dispel. Perhaps it might actually be better to retain a higher corporate tax rate but to devote the additional tax revenue generated to delivering a practical and workable tax system for UK business.”