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Autumn Statement: London business leaders give their reactions

There were few surprises in the Chancellor, Philip Hammond’s Autumn Statement today, with many of the stand-out iniatives, including a boost in research and development investment and the clamping down on letting agents fees, already revealed prior to today’s announcement.

While we’re still chewing over the small print, Bdaily London has canvassed some snap reaction from the capital’s business leaders.

If you missed the budget announcement or want to see the key points, click here for our Autumn Statement summary.

Clamping down on letting fees

Ian Thomas, LendInvest

“Scrapping letting agency fees is surely at odds with the government’s goal to promoting a healthy rental market. Landlords will be squeezed from yet another angle, while many tenants will eventually foot the bill.

“Letting agents should be expected to account for the fees they charge, not pass the cost of the work they do to landlords.

“The government cannot drive forward its strategy for productivity if it doesn’t create a mixed-tenure property market that’s truly fit for purpose. Until we fix the housing crisis, nurturing a healthy rental market is as important as helping more people to own their own homes.”

Jeff Doble, Dexters

“At Dexters we have always charged customers fairly, splitting some costs between the landlord and tenant. Our tenant charges are relatively modest and unlike most agents, our landlords pay us monthly rather than ‘up front’.

“Whilst we await the exact detail of the legislation we broadly welcome the Government’s action on this. We would prefer to see compulsory regulation of letting agents but this is a step in the right direction, as it will lead to more transparency and make life difficult for rogue estate agents.”

Chloe Marienbach, Weroom UK

“Philip Hammond’s announcement to ban letting agent fees for tenants in today’s Autumn Statement is a step in the right direction for the rental market and its current state. This announcement proves to us that the government is making the necessary changes to support the large proportion of the UK that are renting and are not in a position to buy a home, or are simply choosing to rent long term.

“Announcements made in the Budget and the Autumn Statement in previous years have notoriously prioritised the needs of first time buyers with financial relief and support.

“The government was certainly not wrong to do this. However, when looking at the state of today’s property market, people young and old are staying in rental homes for longer and tenants should not have to foot the bill for simply not being able to afford to buy, especially in a market where house prices could rise faster than salaries. The initial outlay for renters moving into a property can have a significant impact on personal finances so to have this reduced through the abolition of agent fees could make a for a positive difference to millions.”

Paresh Raja, Market Financial Solutions

“In terms of what the Chancellor did announce, measures have been introduced to ignite retail demand in the letting and buying arenas, a welcome decision to catalyse movement at a time when consumer reticence could have threatened to take hold.

“To that end, the banning of letting agents fees was unveiled to alleviate the strain on renters by ensuring they no longer have to pay upfront fees to estate agents. This cut on administrational costs will lead to a more buoyant rental market, with tenants freer to take advantage of an increasing number of rental opportunities across the UK, in turn encouraging further investment into the country’s buy-to-let market.”

New savings bond

Giovanni Daprà, MoneyFarm

“The new savings bond announced today is a reminder from the government that interest rates are low so Brits need to consider an alternative to cash savings. Chancellor Hammond has provided a potential solution in terms of capital preservation – however a 3 year term at 2.2% will tie up money.

“Some expectations suggest inflation may shoot above the target 2% during that time frame, in which case locking money into this bond may hinder wealth growth.

“This is one option but each individual needs to look at their personal circumstance and financial goals to see if a savings bond is a good solution for them. There are other alternatives to cash savings in the investment market, the growth of robo-advice has helped make this more affordable.”

Digital infrastructure investment

William Newton, WiredScore

“With its new targets for full-fibre broadband, the government is setting goals that will truly future-proof the UK’s connectivity infrastructure – rather settling for part-fibre investments that will not meet the digital needs of businesses and consumers in five years and beyond.

“There is certainly a long way to go before the UK becomes fully fibre – with many areas still not yet benefitting from the government’s previous ultrafast or even superfast targets.

“But this new investment is another clear example of the government’s essential investment in ensuring that the UK stays at the forefront of future-proofed digital industries.”

Venture Capital investment boost

Paresh Davdra, RationalFX

“The Chancellor Philip Hammond has announced a raft of economic measures in his Autumn Statement just now. Hammond’s statement maps out a new direction for post-Brexit Britain, with an emphasis on investment in infrastructure, housing, and boosting the UK’s productivity in a step away from the austerity-focused policies of his predecessor.

“Of particular note to businesses is the Chancellor’s commitment to supporting UK tech start-ups and preventing them from being absorbed by much larger companies, with £1bn of new funds being made available . This will be welcome news as it not only ensures the long-term survival of many fast growing start-up firms but it also ensures the UK’s status as a nurturing environment and hub for tech entrepreneurs.

As predicted by many, Hammond’s economic growth forecast for 2017 saw a reduction to 1.4% from the 2.2% predicted in March. Even so, the pound rose slightly during the announcement, with high value investments such as funding local growth in the north and midlands, as well as funds for innovation and productivity, striking a positive note with the markets.

“However this optimism did not last long as the uncertainty that still remains over the future of the UK’s economy due to Brexit still appears too great for the pound to escape. Analysts will likely be watching closely over the coming months to see whether or not the measures contained with the Autumn Statement will have the desired boost to sterling and the UK.”

Sasha Yanshin, Strategy Desk

“Strategy Desk welcome the investment in venture capital funds to unlock £1 billion in finance for start up technology firms. This investment will help to ensure the UK is driving innovation forward. Digitally native financial products are on the rise and this will help!”

Daniel Hegarty, Habito

“The majority of Start-up investment and acquisitions still comes from outside UK, so it’s encouraging to see the government recognising the opportunities start-ups like ours can bring to British economy.

“The new £400m investment capital fund will allow many more business to scale-up on home soil and the innovation investment in broadband and 5G will provide a more secure backbone for digital business providing services to the public.”

Hugo Borge, Momondo Group

“Hammond’s announced investment in innovation and infrastructure is a step in the right direction, and in particular the £400m influx into British VCs to help start-ups. The more courageous our startup ecosystem becomes, the more likely we are to shape and create the future of digital commerce.

“We had however hoped to see more in this area – ideally news of additional runways at Gatwick or Manchester, because we believe these are essential to the UK’s future health as an economic hub. This is a time to be bold, showing confidence in planning for the future.”

Hayley Bevis, Coffin Mew

“Venture Capitalists (VC) provide extremely useful expertise and resource to businesses, whilst opening a door to new opportunities and connections that those companies may not otherwise have had.

“Whilst this investment is positive news, its size compared to others announced today seems to be fairly light. It is difficult to tell, at this stage, whether such an investment will be enough to keep overseas investors and purchasers from digging deeper into their pockets to acquire an interest in the best innovative and fast growth companies that Britain has to offer. Time will tell.

“You cannot, of course, read this headline in isolation. The announcement of a new National Productivity Investment Fund which will provide for £23 billion of funding over the next five years, together with an additional £2 billion per year for research and development by 2020-21 and the fall in corporation tax to 17% all helps towards the aim of building a stronger and more resilient British business base. The Chancellor’s next challenge is getting that base to remain in Britain for the long haul.”

What the venture capitalists are saying

Alex Macpherson, Octopus Ventures

“The key focuses of today’s Autumn Statement was to ensure the UK economy remains stable after the uncertainty of Brexit, whilst continuing to invest in the UK economy’s manifest strengths and perpetuate its growth and success.

“It is, therefore, fitting that such an emphasis was put on business, technology and digital infrastructure as the Government looks to support those areas that drive the economy and employment growth.

“We welcome the news that £400m is to be injected into the British Business Bank with a mandate to invest across UK VC funds, and that the Treasury will be reviewing access to finance for those businesses trying to scale.

“Investment and support for the UK’s start-ups to become scale-up businesses is vital if the UK is to create the new breed of world-leading tech companies. Investment into UK productivity and infrastructure, especially those of a digital nature, and those between great innovation hubs such as Cambridge and Oxford, are also very positive moves.”

Stuart Veale, Beringea

“I was pleased to hear the Chancellor’s remarks today about ‘investing today for the economy of the future’. As he said, more needs to be done to support the UK’s research, development and innovation sectors, to build on the UK’s strengths in these areas.

“It’s definitely a positive move that the Government wants to help British tech businesses. It will be interesting to see the details around the new £23bn National Productivity Fund and the additional £400m going into the British Business Bank to invest in venture capital funds.

“Overall, in these uncertain times, it’s a good moment for the Government to be investing in the economy of the future.”

Research and development investment

Matt Clifford, Entrepreneur First

“By investing an extra £2bn per year in research and development into technologies such as robotics and biotechnology, the government is helping to support the pioneers of new industries that are playing a major part in Britain’s long-term global competitiveness.

“By taking this opportunity to prove its commitment to small technology businesses, the new administration is putting measures in place to take advantage of the ‘once-in-a-generation’ opportunity for Britain to cement its role as a leader in tech innovation.

“A position further underlined with news of the further cuts in corporation tax and tax free personal allowance - moves that will not only encourage the thriving companies being created in the UK to stay here, creating jobs and wealth in the process, but one that can help them flourish by freeing up much-needed capital for innovation and growth.”

Tax cuts for SMEs

Richard Kateley, Legal & General

“Today’s Autumn Statement continues a favourable tax cutting agenda for Britain’s SMEs. Corporation tax at 17% and an increase to the Rural Rate Relief will benefit many UK businesses, so too will the expected business rates relief to be announced shortly.

“SMEs are vital to the health of the UK economy and it is important that the government continues to support them, not only by creating a favourable tax environment but by also ensuring they have easy access to the funding they require to grow. It is particularly important to do this now during the uncertainty of this post-Brexit era.”

Scaleups

Luke Davis, IW Capital

“A series of new measures targeted directly at scale-up enterprise has been announced, demonstrating a clear Government commitment to provide the support for early-stage and growing businesses. The initiatives are encouraging, providing substance behind the intentions stated for the regions in the Spring Budget.

“In what was the Chancellor’s first and last Autumn Statement, national productivity is big on the agenda. Businesses across the nation have come out on top, a new National Productivity Investment Fund of £23bn is to be spent on innovation and infrastructure over the next five years. Specifically – rural business rates relief increased to 100%, £556m for local enterprise partnerships in the north, £542m in the Midlands and £683m in the south west, south east and London.

“Private investment has been presented as a critical factor for his biggest priority – national productivity. What seemed to be a new-age Chancellor confidently delivered investment initiates including £400m into venture capital funds through the British Business Bank, providing a much needed boost of growth finance for our community of SMEs. With the long-term goal of unlocking £1bn in new finance for businesses, this is the statement the private sector had been waiting for, and one that was much needed in light of one the most significant years of change to British business.”