Key measures included corporation tax being cut by a further 1 per cent, the annual investment allowance in plant and machinery increasing ten-fold, small business rate relief being extended for another year, and the planned 3p fuel duty rise being scrapped for good.
The main rate of corporation tax will fall from 22 per cent to 21 per cent in April 2014 - the lowest rate of any major Western economy (it is currently 40 per cent in the US and 33 per cent in France). Osborne hoped this would send out the message: "Come here, create jobs here - Britain is open for business."
Meanwhile, the amount available for the purchasing of equipment will go up from £25,000 to £250,000 – a ‘huge boost’ to 99 per cent of all businesses in Britain, according to Osborne.
Cutting taxes
And the temporary doubling of the business rates relief schemewill be extended for another year. “The small business rate relief scheme helps over half a million small firms, with 350,000 paying no rates at all,” he said. “Today I extend it by a further year, to April 2014.”
Eligible ratepayers will receive small business rate relief at 100 per cent on properties up to £6,000 (rather than 50 per cent), and a tapering relief from 100 per cent to 0 per cent for properties up to £12,000 in rateable value for that period.
The Chancellor also announced that the government would be cutting business taxes further, adding: “We have cut the small companies rate to 20 per cent - but I’d like to help small and medium sized firms more.”
He then reaffirmed the details of the new business bank,which will be handed £1bn of taxpayers’ money in a bid to kick-start lending to small and medium-sized British firms.
'No miracle cures'
“In this Autumn statement we show that this Government is confronting the problems rather than ducking them,” Osborne told MPs at the House of Commons this afternoon. “We offer new support for business and enterprise, so they can create the jobs we need.
“There are no miracle cures. Just the hard work of dealing with our deficit and ensuring Britain wins the global race. That work is underway. The deficit is down, borrowing is down, jobs are being created.”
There are, however, reasons to be disappointed, as there was yet again no mention of cutting VAT,taxes, or red tape for the hospitality industryand no mention of alcohol duty or beer tax, which was debated in the Commons just last month.
Headlines this time around for the nation as a whole included an extra £1bn to be spent on roads and another £1bn to improve good schools and build 100 new free schools and academies.
Growth & deficit
Economic growth is predicted to be -0.1 per cent in 2012, down from the 0.8 per cent initally predicted in the Budget. Meanwhile the deficit - the gap between what the Government spends and what it receives in tax revenue – is forecast to fall from 7.9 per cent last year to 6.9 per cent this year, eventually reaching 1.6 per cent in 2017-18.
The UK’s borrowing is forecast to be £99bn next year, £88bn in 2014 through to £31bn in five years’ time – though it should be noted these figures are more pessimistic than those announced in the March Budget.
It was that Budget announcementfor which Osborne was heavily criticised and has been struggling to regain the upper hand since. This time around, his hands have been largely tied because of the weaker-than-expected economic growth and high borrowing.
For the hospitality industry, there is some good news to be taken from today: Osborne has announced some measures which will help many business owners. But, as he did in the Budget and in last year’s Autumn Statement,the Chancellor still refuses to budge on things like cutting the high rates of VAT and taxes, which many believe to be major barriers to growth.