Autumn Budget 2017: What would London businesses like to see?
The Chancellor of the Exchequer, Philip Hammond, is to reveal the Autumn Budget at the House of Commons this Wednesday (November 22).
In light of the political upheaval this year with Theresa May’s snap election in June that even she admitted her party was not ready for, what other uncertainties are we to expect?
It is evident that a lot of the country does not have much clue as to where we are heading, especially with the looming talks of Brexit.
From stamp duty, tech and housing issues, we spoke to some of London’s businesses - big and small - to get an understanding of what they would like to see addressed in Hammond’s Autumn Budget on Wednesday.
Gavin Poole, Here East’s chief executive
“The Chancellor could invest in digital infrastructure to drive growth. Britain’s tech sector is the best in Europe, but the Brexit vote and subsequent political uncertainty do pose a challenge to it. Supporting technology and innovation is the best way to future-proof businesses and ensure we retain the top spot.
“British business depends on broadband, and more investment would be advantageous. In a modern economy, digital infrastructure has become just as important, if not more important than physical infrastructure. We must invest in fast broadband, as well as faster rail links.
“To set the foundations for future innovation, we must also ensure our young people have the right skills to compete in the global economy. The Government must do more to support the teaching of computer science with less than half of our schools providing the subject at GCSE. After Brexit, it may be harder to attract top international talent, so we should do more to develop young Brits interest in technology.”
Peter McMahon, tax partner at Grunberg & Co
“One rumour is yet another attack on the owner-managed businesses by increasing the rate of tax on dividends.
“In many cases now, there is little to no savings to be had from owning a company as opposed to incorporating a self-employed business and indeed in some cases the owners are worse off.
“Obviously there is the benefit of limited liability, which needs to be considered, but a further attack on the family-owned company would, in my opinion, cause an uproar and I would be very surprised if the Chancellor increased the rates further.”
Rob Beiley, partner at Trowers & Hamlins LLP
“With housing remaining close to the top of the political agenda, Housing Associations and Local Authorities will be looking to the budget to provide more detail about the Prime Minister’s promise of an additional £2bn of investment in new affordable housing.
“However, the industry has made it clear that funding alone isn’t enough to boost housing supply and will want to see whatever the Chancellor has to offer forming part of a cohesive housing strategy that draws upon the measures set out in the Housing White Paper and other policy initiatives.”
John Auckland, TribeFirst
“It’s no secret that the Government is looking at reviewing SEIS and EIS income tax relief schemes (you know they’re serious when they start replacing the words tax relief with tax avoidance).
“However, SEIS and EIS have massively stimulated investment into early stage businesses in the UK, and have contributed to the unprecedented success of equity crowdfunding.
“Brexit has already threatened London’s status as capital of the European tech scene, so the worst thing the Government can do right now is make it harder for startups and growth companies to raise money.
“While it’s likely that some of the benefits of EIS will be taken away, I hope Hammond has the sense to maintain SEIS in its current form and perhaps even expand the scheme to make it even more attractive to both investors and entrepreneurs. They could up the limit from £150k to £200k, or expand the scheme to cover the first three years of trading, for example.”
Robin Paterson, joint chairman and CEO of UK Sotheby’s International Realty
“Just as buyers have begun to adjust to the second home stamp duty over the past couple of months, it is unnerving to see that it is set for a shake-up once again. It will be disappointing to see the Chancellor continue to ignore the much needed benefits that the buy to let sector brings to the property market.
“Whilst there is speculation that standard stamp duty may be reduced to help first time buyers onto the ladder, which is undoubtedly a good thing, the government unfortunately still has very little sympathy for the £1.5m plus market. This is short sighted for two reasons.
“Firstly, although these purchasers make up only 10 per cent of the market, their sizable contribution to the government’s SDLT collection should not be taken for granted. Secondly, £1.5m does not get you very far in the London housing market, this causes a problem for those with homes that have increased in value substantially in the last 10 years…
“In order to tackle the stamp duty backlash that the Government has faced for some time now, Phillip Hammond must implement definitive measures that will stimulate high value sales and ultimately ensure the property market continues to thrive.”
Mani Khiroya, managing director at Fruition Properties
“Prime London development price reductions have already been well reported. However, this malaise is now spreading outwards to the suburbs and will no doubt move into the regions once the reality of Brexit starts to take further toll on both sentiment and actual affordability.
“The fact that the Government has been financially doping the industry using Help to Buy funding, demonstrates that the Government understands the significance of the sector to the economy. However, by continuing to support it, it also shows that the Government does not realise the distortions that it creates to pricing and therefore the adverse impact on the very people that those in power are claiming to help.
“If the Government is serious about delivering new homes where they are needed, it should stop running scared of its traditional voters and implement changes that allow less sacred parts of the Green belt to be developed. This would significantly increase the capacity to deliver much need homes, keep prices down for first-time buyers and therefore boost the economy at a time when it will be severely needed.”
Jason Harris-Cohen, founder of Open Property Group
“My biggest wish for the Autumn Budget is for the Chancellor to reverse the stamp duty changes that were introduced in 2016 for buy-to-let and second homes, resulting in property buyers in England and Wales paying an additional three per cent on each stamp duty band.
“This tax is a deterrent on investment in the private rented sector and will result in fewer rented homes being created. This is especially bad news in light of the extent of the homelessness crisis, with the number of homeless in Britain expected to double by 2041 according to the charity crisis.
“In addition, it’d be great to see stamp duty cuts introduced for first-time buyers; this is believed to be on the cards for next week’s announcement. It would be a breath of fresh air for first-time buyers looking to get on the property ladder…”
Katherine McCullough, development director at Merchant Land
“I would like to see some attention given to reviewing what Osborne’s stamp duty reforms have achieved and ideally, to have them reversed in order to help stimulate the housing market at the top end.
“It would also be encouraging to hear discussion taking place around tax incentives to encourage downsizing; not only to stimulate housing supply but to also benefit the downsizers themselves.
“Finally, a critical and honest conversation around Help to Buy schemes and whether they will be committed to in the mid to long term or brought to an end would be welcome.”
Tim Butler, Innovation Visual
“The Chancellor needs to take definitive, positive action to close the skills gap. The UK economy is losing talented EU citizens from within the tech industry. For example, on average each of our employees has spent 82 hours this year on technology training.
“Businesses should be able to offset against tax the costs of staff time as well as the direct training costs, as this is an investment in the economy’s workforce and future. Technical apprenticeships also need to be funded properly.”
Guita Blake, senior vice president and head of Europe at Mindtree
“This year’s Autumn [Budget] has to champion and pledge further investment into digital skill development in the UK. As we read of more industries starting to be impacted by the rise of automation, artificial intelligence and robotics, it is imperative that we are investing in a new kind of training now, to ensure that young people are equipped for new job roles.
“Furthermore, a robust investment into science, technology, maths and engineering (STEM) careers is essential to put the UK back on the map for digital leadership as these new technologies take hold.
“The robots are coming, and an investment from government needs to be made now to ensure we have the brightest minds to usher in the AI-era, whilst also creating new careers and skills that may not have been previously imagined. We hope to see a strong commitment to digital skills training from the Chancellor next week.”
Calum Brannan, No Agent
“It has been made clear that the current housing market is broken, and the Government has continued to take measures to ‘fix it’ that have impacted landlords in a variety ways.
“For example, the staged introduction of mortgage interest relief is cutting landlord profits, and the three per cent stamp duty levy for new buyers on second homes is deterring new entrants to the market.
“We are hoping this Budget announcement will, in its attempts to fix the rental sector, recognise the valuable and vital role landlords play, and will provide incentives to stop the sharp decline in buy-to-let we’ve seen this last year.
“One thing we’re looking out for is tax incentives for landlords who guarantee tenancies of at least 12 months or longer, as well as a reversal of the stamp duty charges for buy to let and second homes. There are enough initiatives and innovations to fix the property market in the private sector, but the government needs to encourage it, not stifle it.”
Mark Stephen, founder of Reditum Capital
“A combination of soaring house prices, housing shortages and planning permission potholes have caused conditioned problems with the availability and cost of finance for domestic buyers, developers and investors. Together, these issues continue to ruin the chances of an improved UK housing climate.
“Exemptions to stamp duty for first time buyers in countries like Australia were successful in doubling the number of these buyers recently and the Chancellor may be tempted to follow suit. However, for the developers and investors behind these builds, the Chancellor must be careful to not cut off-plan stamp duty exemptions in the process.
“If off-plan stamp duty exemption is removed, we could be looking at a severe hit for domestic developers and a dry up of UK construction of both high-end and affordable developments. One of the greatest things about London property, however, is the attention it continues to receive from foreign investors – those whose pockets run deep and won’t be put off too much by the addition of an off-plan tax.
“Looking elsewhere, we also hope the government gives permission for developers to extend the height of properties without lengthy planning permission labyrinths to navigate around. If regulated thoroughly, this will allow a ‘build up not out’ culture for the city and for larger scale developments in prime locations.
“It would also not be surprising if the government were to reduce or even remove stamp duty for older homeowners altogether. This could encourage downsizing and provide additional housing stock to the market of younger families.”
Peter Tuvey, co-founder and managing director of Fleximize
“We work with thousands of small businesses, and it’s clear that sky-high business rates are one of the biggest impediments to their growth.
“Many companies are yet to feel the benefit of the £300m relief package that the chancellor announced in March, due to fundamental flaws in the way it’s being delivered.
“If the government ploughs ahead and increases rates by four per cent next year, it could be the final nail in the coffin for these businesses, which are the backbone of the UK economy. I sincerely hope the chancellor recognises the risks of hitting companies with higher rates, and instead announces a package of measures that offers genuine support to Britain’s small businesses.”
Chas Moloney, director of Ricoh UK
“Our hope is that the Chancellor will use the Autumn Budget announcement as an opportunity to detail his plans to equip employees across the UK with the appropriate digital skills for the workforce of tomorrow, helping them to adapt seamlessly to rapidly changing job roles.
“With emerging technologies like robotics and artificial intelligence (AI) constantly on the rise, the UK needs to focus on investing in these technological advances if we are to remain a progressive digital powerhouse on the international scene.
“The lack of students taking up computer science not only at degree level, but also across the education system is nothing short of concerning, and we hope that the Chancellor will directly address this issue. The responsibility falls on our government to provide today’s youth with the digital education necessary to benefit from the rise of these innovative new technologies that continue to reshape the way business is done globally.
Only by making these subjects as appealing as possible to the younger generation can we take advantage of the number of gifted youngsters entering today’s workforce, and, in turn, enable both this and subsequent generations to swiftly adapt to changing market conditions.“
Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →