Autumn Statement lacks bank funding details, say business groups

Business groups have welcomed measures contained in the Autumn Statement to support UK firms but want clearer details and timescales on the creation of a state backed Business Bank.

The Government revealed yesterday that it will co-invest £300 million alongside private investors over the next two years into a Business Bank, but said any further details would be set out late in December 2012.

Reactions to the announcement came after the Bank of England revealed that the Funding for Lending Scheme - another Government initiative designed to boost lending to small businesses - had been poorly taken up by banks and building societies.

While the Federation of Small Businesses welcomed the measures on capital allowances in the statement and the cancellation of the 3p rise in fuel duty originally planned for January, it was one of many business groups to urge the Government to act swiftly to ensure funding reaches growing companies and drives economic growth.

Elsewhere, the Forum of Private Business's chief executive Phil Orford described the statement as good news for small businesses in cutting day to day costs.

"The increase in the Annual Investment Allowance to £250,000 is welcome but a tacit admission that the decision to cut the same allowance to £25,000 this year was a wrong one.

"Nevertheless, we welcome this increase and urge businesses to take advantage of it. There are big savings to be had here for firms who've been waiting for the right time to invest and upgrade equipment, and this kind of spending tends to wash right down the supply chain."

With regards to personal finance, the Chartered Institute of Taxation (CIOT) said the Statement was a 'mixed bag' for pensioners.

The CIOT noted that whilst a small band of pensioners were set to gain from the increase in the basic state pension to £110.15 from April 2013, the phasing out of the age-related personal allowance was likely to hit those at the lower end of the income scale.

Robin Williamson, technical director of the Low Incomes Tax Reform Group, explained: "Although nobody will lose in cash terms, those approaching 65 now may have to revise their expectations and prepare to pay more tax than they might have anticipated. And more pensioners could be drawn into self-assessment as a higher proportion of those reaching 65 become, or remain, taxpayers than in previous years."

Our full report into the Autumn Statement can be found here.