Chancellor Jeremy Hunt today unveiled what he called a huge boost for British competitiveness in an Autumn statement for growth.

He announced a series of measure with the “overall impact of £20bn a year within the decade – the biggest ever business boost for business investment in modern times”.

Key to this was a series of measures such as the abolition of class two national insurance entirely, saving the average self-employed person £192 a year as well as a one per cent cut in Class 4 national insurance from April – and a two per cent cut in employee national insurance contributions by the start of next year.

He said the government will invest £500m over the next two years to fund more innovation centres to help make the UK an “AI powerhouse”, something inspired by the success of the supercomputing centres in Edinburgh and Bristol.

He announced £50m in funding over the next two years to increase the number of apprentices in engineering and “other key growth sectors” and an increase in the National Living Wage by 9.8% to £11.44p per hour.

In response, Adam Zoucha, MD EMEA at accounting workflow provider, FloQast described it as  the offer of “a cashflow band aid” with the capital allowance enhancements. He said: “The ability to fully expense capital investments against profits, will keep more cash in business bank accounts. It will also help business leaders secure sign off for new investments that enhance productivity. It’s a good leaver for organisations looking to drive growth in a challenging market and will enhance GDP.

“This measure alone is not enough to re-invigorate business. The economic conditions remain tough, and organisations need to retain a tight grip on every expense.”

Faye Church, Senior Chartered Financial Planner, Investec Wealth & Investment was quick to attack the dividend allowance reduction from £1,000 to £500 in April 2024. “It’s an allowance that’s almost not worth having,” she said. “An investment of £15,000 in the FTSE 100, yielding on average 3.5%, would breach this threshold. 

“It may be worth continuing to reassessing whether dividends are the most effective way of receiving income, especially if you own your own business or have the flexibility to generate an income in other ways. Fixed income investments such as corporate bonds and gilts have definitely been a very attractive option whilst interest rates have been so high.”

Neil Rudge, MD of Enterprise at Shawbrook said: “As rate rises appear to have reached their peak and inflation continues its retreat, the Chancellor has been given some breathing space to give businesses more comfort to unleash capital and commit to more substantial investment projects going forwards; good news both for the business and wider UK economy.”