SMEs expected to be ‘worth £217bn to economy by 2020’

New research suggests that Small and Medium-sized Enterprises (SMEs) across the UK’s largest cities will contribute approximately £217billion to Britain’s economy by 2020.

The news follows a study carried out by the Centre for Economics and Business Research (CEBR) in collaboration with Hampshire Bank Trust, which suggests that the UK’s “top ten cities” will welcome mass SME growth over the next few years.

Overall, their report claims that SME contributions to the UK economy as a whole will rise by 11 per cent from 2015 to 2020.

Last year, SMEs reportedly contributed £196bn. As much as 76 per cent of this came from the City of London (£149bn), which is home to the largest number of SMEs in the country.

However, CEBR’s report suggests that strong growth should be expected across all of the UK’s major cities before 2020.

Bristol is predicted to grow by 14 per cent, whereas Birmingham is expected to see growth of 11 per cent.

Growth in the so-called Northern Powerhouse cities of Leeds and Manchester will swell by 15 per cent, whereas SMEs in Tyneside, Newscastle and Gateshead, will grow by 10 per cent.

Mark Sismey-Durrant, Chief Executive at Hampshire Trust Bank, said: “As the Government prepares for the first Autumn Statement following the decision to leave the EU, I urge them to keep the spotlight on smaller companies by creating conditions which will support their continued growth.“

Hammond urged to reverse Osborne’s “successive cuts” in Autumn Statement

Chancellor Philip Hammond has been urged to use his forthcoming Autumn Statement to reverse a string of “successive cuts” introduced by his predecessor George Osborne.

The comments come from think tank The Resolution Foundation, which says that Osborne’s drive to cut corporation tax and increase the income tax threshold are likely to prove harmful for the UK in the long term.

According to the think tank, raising the income tax personal allowance will have provided the average low earner with approximately £765 by 2020 – but 80 per cent of all gains from the policy will ‘benefit high earners only’.

Matt Whittaker, chief economist at the Resolution Foundation, said: “With the Chancellor indicating that he will press the ‘fiscal reset’ button in his Autumn Statement, now is the time to rethink the Government’s tax policy.

“The £32bn worth of tax cuts announced since 2010 has been the difference between the Government hitting and missing its deficit reduction targets in the last Parliament, or indeed in this one.

“Tax cuts on this scale have clearly played a role in supporting household incomes, though around four-fifths of the £21bn due to be spent on raising the personal tax allowance by 2020 will have actually gone to the richest half of households”.

Resolution also questioned the ‘wisdom behind’ cutting corporation tax to one of the lowest rates among the world’s largest economies at a time when the UK is still attempting to balance the books on public spending.

Chancellor would like to see Autumn Statement return to ‘fiscal forecasting’

Chancellor Philip Hammond has raised doubt over the necessity of the Autumn Statement, suggesting that the Treasury should move away from “gimmicks and micromanagement” and towards reprioritising its spending and tax decisions on the spring Budget, according to reports.

The comments come less than a month before the Statement is due to go ahead, and in the wake of rising uncertainty over the future of post-Brexit Britain.

Earlier this month, the Chartered Institute of Taxation, Institute for Fiscal Studies and Institute for Government collectively issued a letter to the Chancellor calling for consultation on tax changes to take place sooner than 23 November.

They added that they wished for the Chancellor to proceed with caution in his Autumn Statement, and stray away from introducing a ‘raft of policy changes’ at such a turbulent time.

Yet Hammond has reportedly told colleagues that he would like to see the Autumn Statement effectively scrapped altogether in future, in favour of a return to its initial function of ’fiscal forecasting’.

According to the Financial Times, he added that he wished to move away from “gimmicks and micromanagement”.

Alistair Darling, former Labour Chancellor from 2007-10, commented: “Philip Hammond might want to move to a situation where he has just one Budget, but I suspect that with the uncertainty around Brexit, that may turn out to be impossible.”

Reports have revealed that the 23 November Autumn Statement will go ahead as planned.