The Food and Drink Federation (FDF) said it agreed with the changes to capital allowances and the intention to further reduce the rate of corporation tax.
Melanie Leech, director general at the FDF, said: “The Chancellor’s announcements on increasing the annual investment allowance and reducing the headline rate of corporation tax should both stimulate business investment. This is great news, particularly for an industry which encompasses businesses of all sizes – from global companies choosing to invest in the UK through to small- to medium-sized enterprises looking to grow their operations in response to growing overseas demand for food and drink products.
“Our industry has had seven consecutive years of export growth and we know we can continue to expand the export of high-quality British food and drink. We are pleased that UK Trade and Investment has recently strengthened its commitment to support food and drink businesses and welcome today’s announcement of its funding increase and of the new export finance facility which should also help even more companies to grow through export.”
She added that the Chancellor’s move to abolish the proposed hike in the fuel price next month was a welcome announcement, adding: “It will help both shoppers and businesses who are already feeling the pinch of rising prices.”
Stephen Robertson, British Retail Consortium director general, added that he was pleased to see action taken on areas such as corporation tax, Local Enterprise Partnerships and empty property rates relief, but was disappointed that business rates had not been tackled.
He said: “The Chancellor’s failure to offer immediate support for struggling high streets by announcing a business rates freeze is disappointing. Business rates rose dramatically in both 2011 (4.6%) and 2012 (5.6%), adding more than £0.5bn to retailers’ rates bills. Shop vacancy numbers and retail employment are already being hit.
“The Chancellor should have removed the threat of a further 2.6%, £175m increase next April to avoid more empty shops. It’s welcome news that small retailers will benefit from relief for an extra year, but retail chief executives tell us a third successive substantial rates hike will deliver a further blow to investment and job creation. It is not too late for the Chancellor to offer a freeze to prevent that.”
Recovery “a hard road”
Addressing MPs in the House of Commons yesterday, George Osborne said it was taking time for the British economy to heal, as debt-cutting targets were missed resulting in austerity measures extended to 2018.
He added: “People know that there are no quick fixes to these problems, but they want to know that they are making progress. It is a hard road but we are getting there and we have much more to do.”
Independent forecasts from the Office of Budget Responsibility (OBR), announced as part of the Autumn Statement, revealed that growth had been downgraded from 0.8% to -0.1% for the year, as well as for 2013 from 2% to 1.2%.
Further forecasts were made on the growth of the economy, with a central forecast of 2% made for 2014, 2.3% in 2015, 2.7% 2016 and 2.8% in 2017. The OBR said that this would leave real GDP 3.2% lower in 2016 than it forecast in March, and explained: “Most of this downward revision is assumed to be cyclical – and therefore eventually reversible – rather than structural and permanent.”