What does the Autumn Statement mean for us ...

The Autumn Statement is the outline of the government's plans based on the latest forecasts for the UK economy from the Office for Budget Responsibility (OBR).  The OBR’s Responsibility report is its assessment of the UK economy's likely performance over the next five years.

It reports on the state of the public finances and assesses whether the government is likely to achieve its goal of balancing the UK's budget within five years.
The statement was delivered against a backdrop of the largest industrial action in decades and the on-going crisis of the Euro. 

One thing seems clear to me; the claim that Britain could come safely through the global economic storm merely by sticking to the coalition's 2010 deficit reduction plan has been destroyed – only 18 months after it was made.  That means, economically, potentially tougher times for all of us; and, politically, the coalition parties now cannot go to the next General Election in 2015 claiming to have balanced the books.  That goal was central to the coalition strategy of 2010-11.

The major factor missing in the new calculations is growth.  Growth this year is now expected to be just 0.9pc, compared with the OBR's March Budget forecast of 1.7pc growth.

For us in the North, where growth and job creation are lagging behind the South of the country, the update did deliver some fresh stimulus for the areas that could be of benefit.  A new policy of credit easing, worth £40bn which is to be targeted at Small to Medium businesses (SMEs) who find it difficult to raise capital, via the normal bank-route is being introduced.  Under this scheme, the government would underwrite banks' borrowing so they could pass on cheaper loans to firms turning over less than £50m.

This could be a major boost for growth and jobs as SMEs provide 60% of the private sector jobs in our region and certainly access to capital is a significant problem to a high number of the SMEs I speak to and is an ongoing cause for hesitation when considering creating a new job.

So, although the news from the Autumn Statement may not be what we were all hoping for it certainly was what many in the business world were anticipating and for some local businesses the initiatives borne out of the post recession cloud could be just what they need to kick start a more productive New Year!
Wishing you all a very Merry Christmas and a Prosperous 2012.

If you would like to discuss this article further please contact David Wainwright on david.wainwright@sewellm.co.uk