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Autumn Statement 2023: Industry Reaction to Hunt’s Announcements

Chancellor Jeremy Hunt has unveiled his Autumn Statement, outlining the key financial decisions for the UK aimed at bolstering economic strength and resilience. In this week’s Spotlight, industry leaders provide their insights into the implications for consumers, businesses, startups, the tech sector and investors.

Hunt promised 110 different measures to help grow the British economy and boost business investment by £20billion a year, such as helping entrepreneurs raise money, reducing national insurance, offering a tax break for businesses that allows them to save on corporation tax by investing and a plan to help unlock pension fund investment for technology and science schemes.

Economic resilience and taxation

Jonathan Andrew, CEO of Bibby Financial Services, welcomed the Chancellor’s decision to permanently adopt 100 per cent full expensing on capital spending. He sees this move as a significant confidence booster for small and medium-sized enterprises (SMEs) and an opportunity for businesses to invest in innovative equipment and pivot their offerings.

Andrew highlighted the importance of responding to the needs of SMEs, saying: “In our most recent research among SMEs, 65 per cent of respondents told us they would like to see the next government implement tax incentives to support them. Today’s announcement is a welcome indication that politicians are responding to their needs.”

This sentiment is echoed by Claire Trachet, CEO and founder of business advisory Trachet, who highlights the extension of the tax break as a relief for companies facing economic challenges, saying: “The government are doubling down on their backing for business growth in the UK.”

Arun Singh, global chief economist at data analytics company Dun and Bradstreet, also expressed optimism about the statement, commenting: “The big policy announcement making permanent the ‘full expensing’ corporate tax relief scheme will improve business sentiment and stimulate investment, in time.”

While Eldar Tuvey, CEO of Vertice, the spend optimisation platform, called the tax cuts “a welcome boost for UK businesses”.

Innovation and technology

The Autumn Statement has placed a significant emphasis on driving innovation in the AI and tech sectors, with a focus on investment and development. The Government also pledged to spend £500million over the next two years on the computing power for AI models to help make the UK a world leader in technology.

Khalid Talukder, co-founder of DKK Partners, underscored the potential of the UK to become a technology superpower, stating that the measures “can empower businesses to lead innovation and make the UK an attractive destination for technology development”. Tratchet also believes the additional funding for UK AI will enable tech firms to bring cutting-edge products to market faster.

Joining in the welcome, Tom Whittaker, senior associate at independent UK law firm Burges Salmon, noted that the Government “recognises much of what industry has been calling for – investment, access to capital, access to computing capability”. While Camilla de Coverly Veale, policy director of the Startup Coalition, highlights the critical role of compute in AI startups – “There are no AI startups without compute. It’s expensive and demand is still outstripping supply – anything that helps plug the gap is welcome.”

Wayne Johnson, CEO and co-founder of Encompass Corporation, also struck a positive note, welcoming the commitment to the technology industry and investment: “This support, and tangible impact, is imperative to bolstering the UK’s position as a leading global technology hub. Attracting sustained investment, from Government, venture capitalists and tech incubators, remains key to the growth of the technology industry and helping to foster new innovative solutions, such as Generative AI, and maximise the potential of others that can drive the fintech sector forward.”

However, Tara Waters, partner and chief digital officer at law firm Ashurst, raises a note of caution, remarking: “£500million is hardly a drop in the bucket compared to the billions of capital we have seen flowing to global AI businesses just in the past year.”

Payroll and administration

John Pearce, chief customer officer at CloudPay, considers the challenges posed by constant economic changes, emphasising the need for innovative technology solutions to ease the burden on payroll teams. He said: “The need to have a payroll set up that accommodates speed and flexibility isn’t going to dissipate any time soon.”

Oliver Prill, CEO at Tide, looked at the importance of uninterrupted cash flow for small businesses, particularly in combating financial crimes like push payments (APP Fraud), stating, “Small businesses tend to be more sophisticated than consumers with ordinary bank accounts.”

Savings and personal finances

Simon Merchant, CEO of Flagstone, voiced concerns about savers paying taxes on their savings due to stagnant tax thresholds. He calls for reforms to protect savers and encourage financial responsibility: “We wanted to see the Treasury raise the threshold on the Personal Savings Allowance.”

For Which? Money, it’s encouraging that the government has confirmed that it will push ahead with plans to consolidate small pots below £1,000. But its editor Jenny Ross warned that the government needs to “prioritise seeing through the introduction of the much-delayed dashboards programme and its small pots consolidator as soon as possible.”

But Nigel Green of deVere Group, an independent financial advisory organisation, criticised the Autumn Statement for what he perceives as missed opportunities in helping both families and businesses. Green believes that more could have been done to address the financial challenges faced by these groups.

Business investment and infrastructure

Sachin Agrawal, UK managing director at Zoho Corporation, praises the development of investment zones, which can boost local economies and support work-life balance for employees, stating: “Developing research hubs, investing in local infrastructure, and creating thousands of new jobs will make regions outside of busy city centres more attractive for businesses.”

Outlining the importance of investment in scaling tech companies in the high-growth sector, Martijn de Wever, CEO and founder of VC company Floww, said: “We must commit to increasing levels of investment.”

Finally, Andrew Drylie, investment manager for Quadri Ventures, addressed significance of supporting early-stage start-ups, stating: “We need to invest in the infrastructure and people that can allow early-stage businesses to grow.”



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