Smaller businesses are receiving a "helpful springboard" for growth next year via the Autumn Statement, according to Phil Orford, chief executive of the Forum of Private Business (FPB).
"A 3p rise to fuel duty in January would have been nothing short of economic vandalism in the current climate," he said. "In fact, it would have been hard to imagine a worse start to 2013 for the UK economy."
The business lobby group welcomed a number of the schemes outlined today by the chancellor, George Osborne, including a tenfold increase in the Annual Investment Allowance, a 25 per cent cash injection for UK Trade & Investment to promote exports, as well as the cancellation of the fuel duty rise that had been planned for January.
"We had urged the Treasury to commit to the concept of a fuel duty stabiliser by the end of the current Parliament, so what we have here is temporary relief instead of a serious policy change with real lasting benefits, but we cannot see many businesses bemoaning that just yet," added Orford. "Fuel prices have reached a cliff edge."
An extension to small-business rate relief would also be good news for SMBs.
But Orford added: "The increase in the Annual Investment Allowance to £250,000 is welcome but a tacit admission that the decision to cut the same allowance to £25,000 this year was a wrong one.
"Given that UK businesses are currently sitting on £700bn of cash reserves, it could be argued that the earlier actions of the chancellor created a disincentive to invest through 2012, at a time when business needs confidence to create growth."
Channelling the benefits?
Nevertheless, the rise meant big savings for firms looking to invest or upgrade equipment – which would no doubt benefit the supply chain as a whole, including the IT channel.
Osborne also promised to employ 1,500 more tax inspectors, with a view to clamping down on "aggressive tax avoidance". Orford said that in the past HMRC had focused more on SMBs, so this was a "healthy rebalance" of the system.
"The likes of Starbucks have brought this on themselves," he said.
Overall, the Autumn Statement should help smaller businesses cut their day to day costs – something the FPB had been very keen to see.
"While of course it is disappointing that government is missing some debt targets, the overall forecast suggests the government should stay the course it is charting to maintain confidence in our economy.
"It is essential because the government's own credit rating is essential to some of its schemes such as Funding for Lending," Orford concluded.
"We wait to hear more on the business bank, and of course just how much of the Heseltine Review the government is taking seriously, come spring."
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