Autumn Statement reaction round up: Part One

Autumn Statement deafening silence over apprenticeship funding, says FMB

The Government has offered no clarity on its plans for apprenticeship funding reform in today’s Autumn Statement, according to the Federation of Master Builders (FMB).

Brian Berry, Chief Executive of the FMB, said:

“Apprenticeship funding still hangs in the balance with no clarity offered by the Chancellor in today’s Autumn Statement. We had hoped government would publish its response to the May 2014 consultation on funding reforms for apprenticeships but as things stand, we are no closer to understanding if Ministers have taken heed of our advice and decided to review their ill-conceived proposals.”

Berry continued:

“Like many organisations which represent SMEs, we have warned the Government that if it implements its apprenticeship funding reforms as proposed, they will greatly detract from the ability and desire of small firms to train apprentices. As two-thirds of all construction apprentices are trained by micro-businesses – that is the very smallest of firms – this is extremely concerning. Although we welcome the abolition of employers’ National Insurance contributions on earnings up to the upper earnings limit for apprentices aged under 25, what we really need to hear is an alternative way forward for SME apprenticeship funding. Perhaps government has decided to kick the issue into the long grass in which case I urge Ministers to respond as soon as possible – uncertainty around apprenticeship policy is the last thing our industry needs when facing an ever-growing skills gap.”

Berry concluded:

“On a more positive note, the extension of the Funding for Lending Scheme as announced in today’s Autumn Statement is welcome, particularly its renewed focus on SMEs. Acquiring appropriate levels of finance remains the single biggest barrier to construction SMEs which are trying to grow and prosper and government must pull as many levers as possible to address this issue.”

BPF: SDLT reform could sound the death knell for Mansion Tax

The British Property Federation (BPF) comments on how the SDLT reform announced today in the Autumn Statement will affect the property market.

Liz Peace, Chief Executive of the British Property Federation, said:

“The SDLT system has been in desperate need of reform. It currently provides such a disincentive to move and leads to a large number of homeowners extending upwards, downwards and outwards. This will help to free up the market and get people moving into the homes that they want. We are pleased to see other reliefs remain, such as for multiple dwellings, which is very important to the build-to-rent investment sector. Some issues however remain, and we look forward to working through these with officials in the coming weeks.”

“A little bit more notice would have been helpful as the sector will have to get to grips with the changes by tonight. There will be people paying a lot more SDLT at the top end of house prices and the rapid speed of implementation no doubt reflect any rapid moves to avoid paying. With high value homes paying far more this will hopefully be the death-knell for any more talk of mansion taxes.”

Glenigan Autumn Statement Reaction: Impact on construction industry

Commenting on today’s (3 December) Autumn Statement announcement by the Chancellor of the Exchequer, George Osborne, Glenigan Economics Director Allan Wilén said:

“Stamp duty reform formed the centre piece of the Chancellor’s 2014 Autumn Statement. The change will remove long standing pricing distortions in the market caused by the tax and offers a welcome reduction in upfront costs for almost all house purchasers.”

“In particular the reforms will narrow the deposit gap faced by first time buyers and should help re-invigorate housing market activity that has been cooling in recent months. The Chancellor’s move, combined with the prospect of real rises in household incomes, should help to sustain the recent growth in new private housing activity during 2015.”

“Prime residential housing is the one loser from the Chancellor’s announcement, which will add to the squeeze on high end property prices in central London that have already been impacted by Labour’s ‘mansion tax’ plans.”

Deloitte: Autumn Statement: all review and no action for business rates

James Thompson, head of business rates at Deloitte Real Estate, comments on the announcement of the timetable for the review of the future structure of business rates.

“The government will publish the preliminary findings of their review of Business Rates Administration and a discussion document on Rates avoidance this month, and a review of the future structure of business rates to report by the 2016 Budget. This review has been long promised and at last we have a firm timetable although the Government has already said that this will be fiscally neutral.”

“The retail rate reduction for shops with rateable values up to £50,000 will increase by only £500 from £1,000 to £1,500 next year. This means that shops receiving this benefit will see their rates bills either falling slightly at rateable values £45,000 or falling by over 11% at £10,000 rateable values.”

“The increase in the multiplier will again be capped at 2% next year, all businesses would have been expecting this to rise by 2.3% in line with the Retail Price Index (RPI). This will amount to a mere 0.3% saving in bills.”

“The Government has acted to prevent backdating of changes to rateable values before 01 April 2015. These will only be available on ratepayer appeals lodged before this date and on changes to Rateable Values made by the Valuation Office before April 2016.”

“This will effectively close the 2010 rating list for the period to 2015 as if the revaluation had not been postponed. It seeks to avoid a rush of appeals just before the revaluation but will bring this forward to March 2015. Businesses that have not yet appealed against their rateable values will have to do so by March 2015 or risk missing out on up to five years of backdated savings.”

“The extension of the small business relief scheme for another year is not a surprise.”