Phillip Hammond, the Chancellor of the Exchequer, has just delivered the Autumn Statement. The statement is by and large good news for the startup sector and excellent news for the Northern Powerhouse.
The Chancellor has also focused on infrastructure with £1.1bn extra investment in English local transport networks and £1.8bn from the Local Growth Fund to English regions. The Chancellor has explicitly built on the legacy of former Chancellor, George Osborne’s, Northern Powerhouse with an announcement of £556m to Local Enterprise Partnerships in the North of England.
“Today we publish our strategy for addressing productivity barriers in the Northern Powerhouse; and give the go ahead to a programme of major roads schemes in the north.” Philip Hammond, Chancellor of the Exchequer
Investment in infrastructure is vital for the long term success of the Northern Powerhouse. By explicitly referencing the Northern Powerhouse, the Chancellor is standing firmly behind the concept. This is great news for Manchester!
A key challenge for the UK going forwards is digital infrastructure and the Chancellor announced £1bn in additional funding for digital infrastructure as well as 100% business rates relief for businesses investing in new fibre infrastructure. The UK needs to speed up its roll out of high speed broadband and any announcement of funding and tax relief for this is overdue but welcome.
The Chancellor has also announced an investment of £400m into venture capital funds through the British Business Bank which he believes will unlock £1bn in finance for growing firms. This has the potential to massively boost investment into startups and will be welcomed by the tech community after the investment slowdown felt post-referendum.
Companies will rejoice that the rate of corporation tax is being reduced to 17% though this was pre-announced. In addition, small businesses in rural areas will benefit from a tax break worth up to £2,900 per year due to an increase in Rural Rate Relief, a tax relief on rates for businesses in rural areas.
Probably the most widely announced change is the banning of upfront fees charged by estate agents in England. This may present further opportunities to online tech agencies and portals making traditional high street estate agents less profitable and less competitive.
Michael Buckworth, our Managing Partner, said:
“The Chancellor has delivered an Autumn Statement that is unapologetically pro-startups. The startup sector has had a rough few months with the uncertainty caused by Brexit. But the announcement of £400m to VC funds shows his support for the sector despite a lack of available cash and serious economic challenges.”
“Supporters of the Northern Powerhouse, and indeed all businesses in Manchester, will welcome the announcement of increased infrastructure spending in the North and the allocation of a specific pool of money to fund it. The long term success of the Northern Powerhouse is dependent on infrastructure spending and this is a good start.”