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Autumn Statement reaction: 'consumer confidence needs to be rebuilt' - BikeBiz

Autumn Statement reaction: 'consumer confidence needs to be rebuilt'

Businesses welcome some of the Chancellor's measures, but there are tough times still to come
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Yesterday (November 29th 2011) George Osborne, Chancellor of the Exchequer, gave his autumn statement on the state of the economy.

The situation is undoubtedly gloomy, with growth forecasts lowered for the UK, unemployment high, spending cuts now set to remain in place for another four years and an increase in public sector lay offs. All of which will doubtless have an impact on the money being spent on the High Street or online in virtually every sector.

But as many commentators have said (many times) before – cycling seems to thrive during recession, or at least economically tough times.

The statement revealed the predicted number of public sector jobs lost by 2017 will be up to 710,000 (rather than initial predictions of 400,000). Next year, the UK economy is expected to grow by 0.7 per cent – down from the predicted 2.5 per cent.

British Retail Consortium director General Stephen Robertson commented on those squeezed consumer wallets: “[The Chancellor’s] measures should provide some help to the hardest-hit families and may go some way to reversing the trend of falling consumer spending, but the challenge for the next twelve months will be to rebuild consumer confidence and stimulate private sector investment.”

Fuel Duty
Businesses welcomed the axing of the proposed rise in fuel duty next January. The BRC’s Robertson said: "Imposing no rise in January is welcome help for hard-pressed customers and businesses already suffering big increases in many of their costs. This should help confidence. But the Chancellor must continue to be flexible. If oil prices remain high he should stand ready to drop entirely the increase he is postponing until August."

Naturally, cycle advocacy bodies will not be so pleased. Prior to the news, sustainable transport charity Sustrans spoke out against a cut in fuel duty, and noted concern over public transport fare rises. The Chancellor did announce a limit to the rise in train fare prices, which may be some consolation.

Jason Torrance, Sustrans’ policy director said (before November 30th): “Those calling for a cut in fuel duty need to be honest about what else the government should cut and how much train and bus fares should increase to be able to afford a reduction in fuel. The Chancellor should stick to his guns, and invest the extra money into public transport and walking and cycling schemes that everyone can benefit from.

“With oil reserves in decline, and the middle east increasingly volatile, it is time to have a transport policy that weans us off our oil dependence, rather than encouraging the population to keep motoring.”

Osborne also announced additional funding for the road networks. Institute of Advanced Motorists (road safety and driving standards campaigner) chief executive Simon Best said: “£270 million for managed motorways is good news. In some cases managed motorways have halved the number of crashes. They also ease congestion and cut carbon emissions. The extra money for our A roads is also welcome. But while today’s announcement will help, we need serious and sustained investment across the UK’s road network. “Our roads are crying out for basic maintenance. Crumbling roads and potholes are a serious problem and a road safety hazard, especially for those on two wheels.”

Business Rates
The BRC chief also commented on Osborne’s business rate announcement: "Despite the option to postpone part of next year's rise, businesses are still faced with the prospect of big increases in rates costs. The option to postpone 60 per cent of April's increase will be a modest help but the bills will still have to be paid in the end. Offering a delay stops well short of implementing a significantly lower increase.

"The Chancellor should have taken the opportunity to switch to a lower CPI-based rise, as he has done for pensions and benefits, and the deferral scheme needs to be simple and workable unlike the last time this was tried."

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