Colliers International responds to the Chancellor’s Autumn Statement

David Smeeton, head of office at Colliers International in Birmingham, said:

“Mr Osborne appears set to stay the course and make good on previous commitments in order to maintain support of the capital markets and keep interest rates low for an extended period.

“Help for SMEs is commendable, but until large corporates begin to invest, further recovery is unlikely to gain much traction and corporate occupier markets are likely to remain subdued.

“Any initiative to encourage pension funds to invest in major infrastructure is to be welcomed, although many UK funds are of a size that has deterred them from entering into his complex market in the past.

“We’d like to have seen an acceleration of measures to bring in Tax Increment Financing in England. 2013 feels like a long time to wait, where this could get stalled schemes moving.

John Webber, Birmingham-based national Head of Rating at Colliers International, said:

“The Government has missed an opportunity to reduce the increase in business rates next year.

“In effect, businesses are being asked to increase their contribution by 5.6 per cent next year while what they get for their money has reduced by 9.9 per cent in 2011-12 and 7.3 per cent in 2012-13. It is clear that what businesses are putting into the pot and what they are getting out is widening. By 2014-15, businesses will contribute £24.1bn and local authorities will only be receiving back £21.9bn. The question is where is that £2.2bn going?

“By the time the 2012-2013 rate year bills appear, businesses will be potentially in an even worse position. To factor in now an increase of 5.6 per cent could lead to businesses cutting their head count in order to keep their total costs within budget.

“Again, for the Government to increase what is for most businesses their third highest outgoing after salaries and rents shows a lack of understanding of the commercial realities of what is going on in the country. It may be busy in Bond Street but in the rest of the country a recession is happening. The outlook for business in 2012 is not rosy.

“The scheme didn’t work before and there is no reason why it should work this time. This is merely a political gimmick, which actually creates more administrative costs for business. It is a cashflow saving, not an actual saving.”

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