Autumn Statement: 29th November 2011
“We will do whatever it takes to protect Britain from this debt storm” promised George Osborne in today’s Autumn Statement.
What might that mean for small businesses?
Additional access to finance
A new National Loan Guarantee Scheme is to be introduced. The government will allow certain banks access to cheaper-than-usual funding under a government guarantee, on the basis that the banks must then lend that money on to small businesses at preferential rates.
It’s estimated that under this scheme, small businesses will be able to borrow money with interest rates of up to 1% less than usual.
Businesses with turnover up to £50million a year will be eligible for the scheme, which will give priority to new loans and overdrafts.
The scheme will initially have access to £20billion worth of investment in its first two years.
It’s planned to start in the “next few months”.
The Enterprise Finance Guarantee, which aims to help security-poor small businesses access finance, will be extended to cover businesses with annual turnover of up to £44million (the limit is currently £25million), and some new lenders will be accredited to offer EFG lending.
£75million of government funding is also to be provided to support technology-based SMEs and help them ensure their ideas develop into viable businesses. It’s not yet clear who will be entitled to this money and how it will be distributed – by way of bank funding, or guaranteed investment, for example.
Currently the government aims to help 25,000 small UK-based businesses trade internationally, via UKTI. This number is to be doubled to 50,000.
Improved broadband Internet connection
A National Infrastructure Plan has been published today, identifying investment on 500 new projects, including broadband networks.
£100million is to be invested to create up to 10 “super-connected” cities in the UK. “Super-connected” means broadband connectivity at 80-100 megabits per second, and city-wide high-speed mobile connectivity.
The 10 cities will be Edinburgh, London, Cardiff and Belfast, plus six other cities which will be chosen by a UK-wide competition. The details of that haven’t yet been explained.
Capital allowances of 100% will be available on plant and machinery bought between April 2012 and March 2017 in certain Enterprise Zones: Black Country, Humber, Liverpool, North Eastern, Sheffield, and Tees Valley.
So if you’re in one of these zones and planning a large asset purchase, wait till April!
At the moment small businesses have a holiday from business rates. That’s to be extended to April 2013 – an extra six months.
The government believes that simplification of employment law will help create new jobs. They’re calling for evidence on further reforms to this, and in particular, they want to seek views on the idea of “compensated no-fault dismissal” for firms with fewer than 10 employees, and also on a simpler, quicker and clearer dismissal process.
Watch this space.
So it looks like there are quite a few potentially useful nuggets in the Autumn Statement for small businesses.
We’ll need to see how the National Loan Guarantee Scheme evolves, in particular, and whether this does genuinely make more funding available for small businesses.
- Budget 2017 update: some good news for freelancers
- Could you run your small business from your smartphone?
- Budget 2017: another rough ride for freelancers
- Budget 2017 - what can we expect?
- 4 ways to spring clean your business in 2017