The chancellor’s Autumn Statement has delivered its unappetising medicine but the taste has not been as bitter as many in the industry had feared.
Levelling-up funding was preserved, business rates were not hiked and even investment zones seemed to be given a new lease of life.
On business rates, the bad news came first. Jeremy Hunt said: “It is an important principle that bills should accurately reflect market values so we will proceed with the revaluation of business properties from April 2023.”
However, the medicine came with a spoonful of sugar. Hunt said he would “soften the blow on businesses” with a £13.6bn cut to the tax over the next five years. “Nearly two-thirds of properties will not pay a penny more next year and thousands of pubs, restaurants and small high street shops will benefit.” He added that the package will include a new government funded transitional relief scheme which should benefit around 700,000 businesses.
Melanie Leech, chief executive of the British Property Federation said: “We are pleased the chancellor has listened to the BPF, frozen the business rates multiplier and introduced further reliefs to help prevent a tide of insolvencies on the high street. Many high street businesses have been paying artificially high rates bills for years and the chancellor has recognised this is simply not sustainable.”
Fears that levelling-up funding would prove “low-hanging fruit” also proved to be unfounded. “Our national mission is to level up economic opportunity across the country,” Hunt said. “And that, too, needs investment in infrastructure. So I will proceed with round two of the levelling-up fund, at least matching the £1.7bn value of round one.”
Devolution deals will also pick up pace, with an elected mayor to Suffolk, as well as mayors for Cornwall, Norfolk and “an area in the North-East to follow shortly”.
“Soon, over half of England will be covered by devolution deals,” Hunt said, unlocking £600bn of investment over the next five years.
However, much of the detail of what the chancellor said will only become clear once supporting documents are pored over, while many of the planned spending cuts will be postponed until after the next election.
The fate of investment zones is one such area. Hunt appeared to keep former prime minister Liz Truss’s flagship policy afloat.
The BPF’s Leech congratulated him for this: “We are pleased to see the retention of investment zones.”
However, the detail is a little different to Truss’s plan, with Hunt saying: “I will also change our approach to investment zones, which will now focus on leveraging our research strengths, to help build clusters for our new growth industries.”
There was a new commitment of funding for improving the energy efficiency of buildings. “Today, we set our country a new ambition,” Hunt told the Commons. “By 2030, we want to reduce energy consumption from buildings and industry by 15%.”
This would equate to a £28bn saving from the national energy bill.
Hunt said an extra £6bn of government money would be added to existing commitments of £6.6bn, “doubling our annual investment to deliver this new national ambition”.
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