Small businesses: A cautious welcome, but measures 'a bit of a joke'

Autumn Statement

Britain’s small businesses gave a muted reaction to the Chancellor’s measures aimed at boosting investment – with one warning: “Government efforts are seen as a bit of a joke”.

George Osborne’s main gift to small and medium-sized enterprises (SMEs) was a 10-fold increase in allowances on capital spending such as tools, office equipment and commercial vans to £250,000. The annual investment allowance was slashed by the Coalition to £25,000 in April this year. Mr Osborne has performed a U-turn on that decision, meaning firms will now be able to claim 100 per cent tax relief on capital investments.

But Saurav Chopra, the chief executive of Huddlebuy, which works with 100,000 small businesses, said: “The previous allowance was preventing small businesses from investing for growth. However, Mr Osborne needs to do a lot more for small businesses across the UK to flourish. Government efforts are seen as a bit of a joke.”

The Chancellor also announced the creation of a £1bn Business Bank. But Xenios Thrasyvoulou, an entrepreneur who founded the freelancer marketplace PeoplePerHour, said: “The worry is that this £1bn fund will be out of reach for many businesses desperately in need of capital and support. The Chancellor skimmed over how firms will be able access these funds, how long the application process will take and, crucially, who will be eligible. The problem for small businesses has not been that lenders don’t have cash to lend; it’s that there are far too many hoops to jump through and red tape to cut to even get to the front of the line.”

Case study: Big business benefits, but it’s one rule for me and another for them

Ed Hoad, 29, operates a small recruitment business called Catalyst Executive Search. He and his wife Heidi, a teacher, have a seven-month-old son, Rufus.

I set up a business in 2010. With the economic turbulence, it’s been quite stressful actually watching my wife’s maternity pay dwindle and not really knowing what the economy is going to do.”

My wife and I have said we’re not going to spend that much on Christmas presents this year and it’s not because we don’t have any money, but I think you just need to be careful at the moment.

Having your own business, you almost live year to year, good years are great and you try and keep some money back but I think the cumulative effect of the recession makes it very hard  to actually keep a buffer in for  next year.”

I’m so angry they can get away with it. I just don’t understand how that can be so. I feel it is one rule for me and another for them. The thing that really frustrates me from the Autumn Statement is the fact that they dropped corporation tax to big businesses to 21% but mine isn’t going to change. Mine’s not going to go down to 19%.”

Case study: These are small measures that won’t make a massive difference for my business

Paul Blazdell, 39, is the sales director of Floppets, a Brighton based start-up which makes small collectible toys which can be clipped on to children’s bikes, shoes and bags.

The Autumn Statement was pretty much what we expected: continuing austerity and not a lot to stimulate growth in small and medium-sized businesses. One of the biggest problems is that banks still refuse to lend, while for us there is the issue of retailers being cautious about new products. We didn’t approach the banks for this venture as we knew it wouldn’t even be worth trying. Thankfully, these days you can sell your products on a website and promote through social media in a way that you couldn’t five years ago.

“The axing of the fuel duty rise is a good move, though you never know whether firms will pass that saving on to their customers. The increase in personal tax allowance is also welcome. If our business grows, the reduction in corporation tax could be helpful but it will have a minimal effect in the short term.

“But all of these are small measures, and I don’t see anything that’s going to make a massive difference for us, as we’re a business of just two people.”

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Financial Controller

£45 - £55k DOE: Guru Careers: A Financial Controller is required to join a suc...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£12500 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Recruitment Genius: Sales Adviser - OTE £24,500

£22500 - £24500 per annum: Recruitment Genius: Inbound and outbound calls with...

Recruitment Genius: Business Development Executive / Sales - OTE £40,000

£18000 - £40000 per annum: Recruitment Genius: This fast growing Insurance Bro...

Day In a Page

Mullah Omar, creator of the Taliban, is dead... for the fourth time

Mullah Omar, creator of the Taliban, is dead... again

I was once told that intelligence services declare their enemies dead to provoke them into popping up their heads and revealing their location, says Robert Fisk
Margaret Attwood on climate change: 'Time is running out for our fragile, Goldilocks planet'

Margaret Attwood on climate change

The author looks back on what she wrote about oil in 2009, and reflects on how the conversation has changed in a mere six years
New Dr Seuss manuscript discovered: What Pet Should I Get? goes on sale this week

New Dr Seuss manuscript discovered

What Pet Should I Get? goes on sale this week
Oculus Rift and the lonely cartoon hedgehog who could become the first ever virtual reality movie star

The cartoon hedgehog leading the way into a whole new reality

Virtual reality is the 'next chapter' of entertainment. Tim Walker gives it a try
Ants have unique ability to switch between individual and collective action, says study

Secrets of ants' teamwork revealed

The insects have an almost unique ability to switch between individual and collective action
Donovan interview: The singer is releasing a greatest hits album to mark his 50th year in folk

Donovan marks his 50th year in folk

The singer tells Nick Duerden about receiving death threats, why the world is 'mentally ill', and how he can write a song about anything, from ecology to crumpets
Let's Race simulator: Ultra-realistic technology recreates thrill of the Formula One circuit

Simulator recreates thrill of F1 circuit

Rory Buckeridge gets behind the wheel and explains how it works
Twitter accused of 'Facebookisation' over plans to overhaul reverse-chronological timeline

Twitter accused of 'Facebookisation'

Facebook exasperates its users by deciding which posts they can and can’t see. So why has Twitter announced plans to do the same?
Jane Birkin asks Hermès to rename bag - but what else could the fashion house call it?

Jane Birkin asks Hermès to rename bag

The star was shocked by a Peta investigation into the exotic skins trade
10 best waterproof mascaras

Whatever the weather: 10 best waterproof mascaras

We found lash-enhancing beauties that won’t budge no matter what you throw at them
Diego Costa biography: Chelsea striker's route to the top - from those who shared his journey

Diego Costa: I go to war. You come with me...

Chelsea's rampaging striker had to fight his way from a poor city in Brazil to life at the top of the Premier League. A new book speaks to those who shared his journey
Ashes 2015: England show the mettle to strike back hard in third Test

England show the mettle to strike back hard in third Test

The biggest problem facing them in Birmingham was the recovery of the zeitgeist that drained so quickly under the weight of Australian runs at Lord's, says Kevin Garside
Women's Open 2015: Charley Hull - 'I know I'm a good golfer but I'm also just a person'

Charley Hull: 'I know I'm a good golfer but I'm also just a person'

British teen keeps her feet on ground ahead of Women's Open
Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkish President Erdogan could benefit politically from the targeting of the PKK, says Patrick Cockburn
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn or a return to a Labour government

Our choice is years of Tory rule under Corbyn or a return to a Labour government

Yvette Cooper urged Labour members to 'get serious' about the next general election rather than become 'a protest movement'