Autumn statement 2011: UK firms digest 'plan A plus'

Coalition has business world firmly onside
Coalition has business world firmly onside

By Alex Stevenson

George Osborne has unveiled measures he hopes will "build the foundations of future growth" in today's autumn statement.

Details of a £40 billion credit easing scheme, which will see the government underwrite extra bank lending to businesses with a turnover of less than £50 million, were outlined in full by the chancellor.

The national loan guarantee scheme will take a few months to get underway, however. An initial £20 billion will be available over the next two years, alongside a £1 billion business finance partnership aimed at medium-sized firms.

Following savings made in this year's Budget Mr Osborne said he could afford to pay for £5 billion of investment in infrastructure projects immediately.

Together with a further £5 billion of spending in the next parliament and £20 billion from private investment, made possible by a deal with two groups of British pension funds, he unveiled a "huge commitment to overhauling the physical transport infrastructure of our nation".

Among the upgrades on offer across England's regions were a halving of the tolls on the Humber Bridge, the construction of a new rail link between Oxford, Milton Keynes and Bedford and work on a new crossing of the Lower Thames.

Thirty-five new road and rail schemes will eventually be followed by over 500 projects, Mr Osborne said.

A series of tweaks to the tax system were made, including income tax relief of 50% for all those investing up to £100,000 on a new start-up business.

Capital gains tax will be waived for all firms investing through the enterprise investment scheme, the business rate relief has been extended until April 2013 and 60% of the increase in their bills can now be deferred.

Shadow home secretary Ed Balls attacked the package of measures contained in the autumn statement. He told the Commons: "We were promised a 'game changer' of a statement, we were promised a growth plan that would secure the recovery.

"Instead he has a plan for growth that means lower growth and higher unemployment... it's not a game-changer, it's just more of the same."

But the business group CBI welcomed the measures, calling them 'Plan A Plus'.

“We particularly welcome the new emphasis on capital spending, and the measures to leverage private sector investment on infrastructure for roads and energy," director-general John Cridland said.


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