The Chancellor confirmed in the House of Commons today (December 5) that he would extend the business rates relief scheme, due to expire next April, for a further year.
He also said he would cap the inflation increase in business rates at 2% from next April, less than the 3.2% rise expected. And he said the government would allow businesses to pay rates in 12 monthly instalments.
On fuel duty, which was frozen this year, he added: “Next year’s fuel duty rise will be cancelled. Instead of petrol taxes going up by two pence a litre, they will stay frozen.”
However, he stopped short of cracking down on energy costs for businesses, a fact bemoaned by Food and Drink Federation (FDF) director general Melanie Leech.
‘Manufacturers will be disappointed’
“… Manufacturers will be disappointed that the Chancellor did not respond to our request for help with business energy costs, which are threatening our competitiveness, squeezing margins and ability to maintain consumer prices,” she said.
With FDF figures indicating exports of food and non-alcoholic drink rose 2.5% to £6.1bn in the first half of 2013, Osborne doubled the export finance capacity available for all business sectors to £50bn.
Leech welcomed government plans to work on a Science and Innovation Strategy for the 2014 Autumn Statement and said the FDF looked forward to food and drink playing a lead role in that.
Summarising the progress the UK economy had made since it was plunged into recession in 2008, he said the country’s deficit was down and growth was up more than had been anticipated.
Doubled GDP growth forecast
Today, the Office for Budget Responsibility had more than doubled this year’s gross domestic product (GDP) growth forecast, from 0.6% to 1.4%, he said.
“Next year, instead of growth of 1.8%, they are now forecasting 2.4%. With faster growth now, it means they’ve revised the following four years to 2.2%, 2.6%, 2.7% and 2.7%. So growth over the forecast period is significantly up.
“It is still not as strong as we’d like it to be, but this is the largest improvement to current year economic forecasts at any Budget or Autumn Statement for 14 years.”
However, more action was required to keep the economy on the right track, especially in view of revised Office for National Statistics data estimating a 7.2% drop in GDP in 2008–2009, he said. That was “even more staggering” than the previous calculation of 6.3%.
For more on responses to the Autumn Statement, see our story Chancellor’s Autumn Statement – in quotes.