Head of ACCA Cymru/Wales responds to the Autumn Statement

Chancellor Jeremy Hunt has today delivered the Autumn budget and we’ve been hearing reactions from Welsh business leaders.

Lloyd Powell, Head of ACCA Cymru/Wales, said:

“Above all, today’s announcement needed to provide stability, and set out a plan to put the UK economy on a surer footing, following months of volatility. This has been achieved to some extent, with tax and spending plans allowing businesses to think ahead, even if circumstances remain exceptionally difficult.

“While more of us being asked to pay more tax was not a surprise, it’s nonetheless disappointing for both consumers and businesses battling headwinds of rising costs. Further, real-terms cuts to public spending will undoubtedly have knock-on implications for public services and the economy.

“While greater certainty is welcome and we look forward to early sight of the details, today’s statement provided few bright spots about the path back to economic growth. As businesses hunker down, it will become more important than ever for government to pump-prime investment and business growth.

“Businesses in Wales will now wait to hear how the Welsh Government’s tax and spending plans will be shaped by today’s announcement, in the hope that this doesn’t translate into less competitive rates of tax, whether on income or property.”

On tax:

“While a routemap for tax changes ahead is useful, wage inflation has raised the spectre of fiscal drag. Scrutiny and transparency about the implications of these tax changes will be key, especially where taxpayers find themselves subject to additional administrative requirements. Many more businesses (and individuals) will find themselves caught in the VAT and CGT regimes, at a time when HMRC is already under severe pressure.

“We remain disappointed about the lack of progress in simplifying our tax landscape – as greater simplicity, certainty and stability in our tax system would undoubtedly create a better business growth environment.”

On public spending:

“Going into the Autumn statement, OBR analysis showed that UK departmental spending is now only 90% of its real value compared to 2010, and capital spending – which is vital to boosting overall productivity – has fallen to a staggering 78% of 2010 investment in real terms. The Covid backlog in public services, from hospital waiting times to courts to HMRC service levels, is likely to deteriorate further with real terms cuts to spending.”

On energy costs:

“Our members suggested that the current energy support package for firms does not go far enough, with a more targeted approach required, especially for sectors where energy costs are disproportionately high. As they look ahead to the next financial year, many small businesses will have been disappointed not to hear more detail about support likely to be available from April.”