Today George Osborne delivered his Autumn Statement. Gone are the days when these are just updates from the Chancellor on the latest economic figures, and this afternoon we had a statement of Budget-like proportions, with a huge number of announcements.
Overall, my impression is that there is a lot of good stuff in the Autumn Statement. There are plenty of small measures that will support startups, particularly for fintech companies. Taken together they add up to a positive package.
A political statement
With less than six months until the next election, it was a politically charged affair. There were small give-aways like freezing fuel duty and further increasing the personal allowance, as well as new transport and science investments, often in marginal seats.
The surprise announcement of the statement was radical reform of stamp duty, which would make property purchases cheaper for 98% of buyers, raising tax on expensive homes. This has been seen by many as an attempt to derail Labour’s plans for a ‘mansion tax’.
Support for startups
There were a few things in the statement specifically aimed at startups:
- Lots of support for fintech. This included a new ‘bad debt relief’ for those lending on P2P platforms, consulting on allowing crowdfunded debt in ISAs, and measures to open up bank data, notably a call to evidence on how banks can deliver APIs.
- £400m in funding for equity investment in high growth companies through the Enterprise Capital Funds. These co-invest in venture capital funds, including funds like Passion Capital and Dawn Capital.
- New digital processes will be introduced to make it easier for investors and companies to use EIS, SEIS and VCTs. This will be a small, but welcome help for everyone involved.
- Entrepreneurs’ Relief has been extended, a bit. The lifetime limit and equity threshold unfortunately haven’t changed, but relief will now be available on gains that are reinvested under EIS.
Enterprise nation
More broadly the Chancellor was keen to be seen as supporting business, and particularly small business.
- The doubling of Small Business Rate Relief was extended for another year to April 2016. More promisingly the government also committed to a full review into the system of business rates, although this isn’t set to report until spring 2016.
- Support for R&D was increased, with tax credits for SMEs increased to 230% from April next year, as well as new measures to streamline the application process (which many startups find difficult).
- There was also new help to take on an apprentice, with employer National Insurance Contributions being scrapped for apprentices under 25.
- UKTI and the Foreign Office are getting £45 million in additional support, with a focus on helping first time exporters.
The future of digital government
Alongside the Autumn Statement itself, another document was published looking at how efficiency savings would be achieved in the next parliament. While this sounds rather dry, it’s likely to have a greater long-term impact on the digital economy than almost anything in the Autumn Statement. That’s because it set out the first glimpse of plans what the GDS will do in the next parliament.
It’s a bold plan, with commitments for new cross-government platforms to deliver payments, track applications (eg for a passport renewal), and book appointments.
Perhaps most exciting from the startup viewpoint is the commitment to ‘ensure that every new digital service is available via an open Application Programming Interface (API) as well as a web browser, to encourage private sector innovation’. This is something I called for in Coadec’s Startup Manifesto and would unlock huge new opportunities for startups.
Plenty more surprises in the small print
There’s much more in the Autumn Statement, and over the next few days I’m sure further nuggets will be uncovered in the fine print.
While we could have hoped for more, there is no denying that this Autumn Statement will be good for startups.