Following Chancellor George Osbournes Autumn Statement yesterday, please find below relevant announcements that might be of interest
Fuel duty
Given the current high cost of fuel, to support motorists and businesses, the Government announces that the 3.02 pence per litre (ppl) fuel duty increase that was due to take effect on 1 January 2012 will be deferred to 1 August 2012, and the inflation increase that was planned for 1 August 2012, currently expected to be worth 1.92ppl,2 will be cancelled. This will ensure that there will only be one RPI increase next year.
Credit easing
The National Loan Guarantee Scheme will lower the cost of bank loans for smaller businesses with turnover of up to £50 million. The Government will allow participating banks to raise up to a total of £20 billion of cheaper funding over the next two years under a government guarantee, provided they pass through this lower cost of funding to smaller businesses. In many cases, this will lead to a reduction of up to one percentage point on the cost of the business loan. The scheme will focus on new loans and overdrafts, to help increase the supply of credit in the economy.
In considering banks’ access to the scheme, the Government will take into account banks’ commitment to smaller businesses. In order to qualify for the guarantees, banks will have to show that they are passing through the benefit of the guarantee to cheaper loans (as in the European Investment Bank’s well-established ‘Loans for SMEs’ scheme). Firms should be able to apply for these funds through participating banks in the normal way. The scheme will be operational as soon as possible, subject to state aid approval.
The Government will also help businesses raise funds from non-bank sources by making available an initial £1 billion through a Business Finance Partnership, to invest in midsized businesses and SMEs in the UK. A number of reports have shown the reliance of these businesses on banks as a source of debt finance.
The partnership will initially focus on co-investment with the private sector through loan funds, which will lend directly to mid-sized businesses in the UK. The Government will begin the process of allocating funds early in 2012. The Government will also consider options for investing through other non-bank lending channels, and welcomes proposals. This will help to diversify the sources of finance available to businesses.
Enterprise
The Government will:
• look for ways to provide a quicker and cheaper alternative to a tribunal hearing in simple cases ¯ a ‘Rapid Resolution’ scheme;
• complete a call for evidence on the impact of reducing the collective redundancy process for redundancies of 100 or more staff from the current 90 days to 60, 45 or 30 days;
• begin a call for evidence on two proposals for radical reform of UK employment law. First, the Government will seek views on the introduction of compensated no-fault dismissal for micro-businesses with fewer than 10 employees. Second, the Government will look at how it could move to a simpler, quicker and clearer dismissal process, potentially including working with ACAS to make changes to their code or by introducing supplementary guidance for small businesses; In addition, the Government will simplify and refocus the Enterprise Investment Scheme and Venture Capital Trusts.
UK exports
The Government has introduced a number of measures to promote trade and investment as set out in the Trade and Investment White Paper. In addition, the Government will:
• spend £10 million to make available to 500 mid-sized businesses each year the bespoke export support services of UK Trade & Investment (UKTI);
• spend £35 million to double, from 25,000 to 50,000, the number of SMEs that UKTI supports each year; work through the EU to complete free trade agreements with India, Singapore and Canada in 2012, and make substantial progress towards completing trade agreements with Mercosur, most ASEAN countries and Japan within the next three years
Regional Growth
Increase the Regional Growth Fund for England by £1 billion, plus Barnett consequentials for the devolved administrations, and extend it into 2014¬15, to provide ongoing support to grow the private sector in areas currently dependent on the public sector.
De-Regulation
To ensure effective delivery of its broader deregulatory agenda the Government will:
• launch a review of regulators to ensure that enforcement arrangements are appropriate, proportionate, fit for purpose and risk-based, in order to tackle heavy handed, prescriptive and inefficient enforcement, and build on good practice where it exists;
• accept the recommendations of Professor Löfstedt’s review of health and safety regulation and look to go further as part of the Red Tape Challenge.
Pensions
Raise the State Pension age to 67 between April 2026 and April 2028, which is expected to save around £60 billion in today’s prices between 2026¬27 and 2035-36.