Autumn Statement 2023 | Main announcements, industry reaction
Additional investment zones, business rates relief, devolution deals, and a series of measures geared towards unlocking planning backlogs were all featured in chancellor Jeremy Hunt’s list of 110 measures for economic growth.
“Our plan for the British economy is working, but the work is not done,” Hunt told MPs as he announced his Autumn Statement on 22 November.
“Our choice is not big government, high spending, and high tax – because we know that leads to less growth, not more,” he added later. “Instead, we will reduce debt, cut taxes, and reward work.”
Vowing to reduce planning red tape, cut business taxes, and improve access to the National Grid; Hunt said his Autumn Statement would boost business investment by £20bn a year.
For those working in property in the North, here are the main takeaways from Hunt’s speech.
First things first, the tax reliefs in freeports and investment zones will now be available for 10 years, rather than the previously determined five. Liverpool City Region, Humber Region, and Teesside are the three Northern freeports.
Hunt also announced a £150m fund for investment zones and reports. This money will last five years and be aimed at helping secure business investment.
The government also announced new investment zones in Greater Manchester and the Wrexham and Flintshire region, as well as the West and East Midlands. The Greater Manchester investment zone will focus on advanced manufacturing and materials. First Graphene, Kadant, Weirt, and Hydrograph have committed an investment worth more than £10m, according to Hunt.
A further £32m has been promised to help support housing delivery, including schemes to accelerate building homes in Leeds, London and Cambridge. The government wants to also introduce a permitted development right to convert a house into two flats provided there are no exterior changes.
To speed up planning, the government wants to bring in a system where businesses can pay extra for an assured timeline for their application. Should the local authority not meet these timeline schedules, the company will get its money back and its application will be processed free of charge.
Reacting to summer’s defeat of its nutrient neutrality plan, the government has pivoted and promised £110m to support river pollution mitigation efforts – measures that Hunt said will unlock up to 40,000 homes over five years.
Hunt allocate £450m for the Local Authority Housing Fund to help deliver 2,400 homes which will be for the most vulnerable.
The 75% business rates relief programme has been extended for the retail, hospitality, and leisure sector. Small businesses will also see a freeze in their business rates multiplier in the next year.
The government is going to be changing the grid connection process to reduce wait times. It will also create a plan to build additional grid infrastructure in seven years, rather than the current 14.
New, but not unexpected, deals were announced during the Autumn Statement. Hull and East Yorkshire secured a mayoral devolution deal (as did Greater Lincolnshire), while Lancashire was announced as having a non-mayoral devolution deal (an honour it shared with Cornwall).
In Lancashire, the deal will create a combined county authority – but there would be no changes to the established councils in the area otherwise.
A delivery board in Barrow-in-Furness is to be created using £5m, according to the Autumn Statement, which says that such a board will “ensure local people see lasting benefits from investment in the Defence Nuclear Enterprise”.
West Yorkshire will receive £2.5bn for the building of a mass transit system. The Autumn Statement also included £8.3bn for roads resurfacing across the country.
A two-year pilot programme will be conducted to see how to drive up the number of apprenticeship take up in key sectors like engineering, thanks to a £50m commitment from the government.
Estimated to accelerate around £90bn of additional business investment over the next 10 years.
Hunt outlined the government’s sectors of interests, committing £500m over the next two years for AI, £960m for green industries, £2bn for automotive zero emission work, £975m for aerospace, and £520m for life sciences.
Comments have been edited for clarity and brevity
A major step forward
Jessica Bowles, director of strategic partnerships at Bruntwood: “Sustained investment in R&D and innovation across the UK’s growth sectors is critical to the future of the economy, and so it’s positive to see this reflected in the Autumn Statement.
“In particular the confirmation of the Greater Manchester and West Midlands Investment Zones – of which two of our most significant and long-term projects, ID Manchester and Birmingham Knowledge Quarter, will play a central role – is a major step forward…
“These initiatives have a greater chance of success if supported by the genuine devolution of power. With that in mind, we welcome the new MoUs on the single settlement funding arrangements for Greater Manchester and West Midlands Combined Authorities. More responsibility, powers and funding to our city regions is a proven way to generate quicker returns and grow the economy in a sustainable way, so we hope to see the government progress the Trailblazer Deals at pace and extend them to other areas.
“More long-term, we would now like to see the government set out a detailed strategy to enable science and technology businesses to align themselves with its objective of becoming a science superpower by 2030.”
Little to cheer for
Stephen Hogg, head of the North West at JLL: “Given the issues the wider economy faces and the fact that inflation and the cost of living remain challenging for both businesses and households, those in the industry will be unsurprised by the fact there’s been little to cheer in the chancellor’s latest statement. Green shoots are appearing as further interest rate rises are paused and inflation moves in the right direction, plus it’s encouraging to see levelling up funding for the regions and investment zones in the Midlands, which should spur some growth. That said, it would be a mistake to enter the new year bullish.
“Still, those in the sector, especially in regions like the North West that will feel the effects of the cancellation of HS2, will likely be disappointed. All eyes will now be on what both major parties set out ahead of the next general election to stimulate growth and regional regeneration, which will have longer-term repercussions on boardroom decisions around issues like investing in workforces and sustainability measures.”
The good, the bad, and the lack of detail in planning reform
David Mawson, chief executive of Placefirst: “The planning reforms announced today could mean we are one step closer to unlocking the full force of the build-to-rent sector in tackling the housing crisis.
“More landlords are today leaving the buy-to-let market than entering it, interest rates remain stubbornly high, and it is very difficult for renters who do want to buy to save up a deposit on their first home amid a persistent cost-of-living crisis.
“That’s why it’s so important that Britain doubles down on the delivery of high-quality rental housing. The BTR sector and, in particular, single-family rental is already delivering the high-quality, energy-efficient and spacious rental options Britain so desperately needs.
“Planning reform is much-needed but, as always, the devil will be in the detail when it comes to today’s announcement. Mr Hunt’s plans must do what they say on the tin; speed up the decision-making process for major planning applications, especially those which seek to deliver new homes.
“Fortunately, we know there is significant appetite for more SFR at local authority level, with recent research we conducted revealing that 54% of councillors would prefer larger family homes over one and two-bedroom apartments. It also showed that 96% of councillors support brownfield land being prioritised for redevelopment – a preference we absolutely share at Placefirst.
“Sensible and strategic reform of the planning system – like that announced today – could finally be what’s needed to give local authorities the powers they need to speed up the delivery of these kind of developments in their areas.”
Saghir Hussain, director of Create It Studios: “Reforming the planning system is something the property industry has been calling for for quite some time. Faster planning applications will make developments more viable for SME developers and investors. In recent years we have seen too many projects stall because of the rising cost of construction and the increased cost of delivering a project between submitting an application and the time it takes to receiving consent.
“With planning fees going up 25% in December, it will be increasingly important for developers to know that the submissions their architects are making for them will be addressed as quickly as possible, so that they can get on with delivering much needed homes.
“My biggest concern though is that whilst councils will be keen to avoid losing fees by missing deadlines, nothing has been done to address the reason why applications are taking so long – the shortage of planning officers within councils up and down the country. What we don’t want to see is councils rejecting plans simply because they don’t have the people power to properly investigate complex applications.”
Ian Magenis, partner at Scanlans: “One area of interest is the ‘Prompt service or your money back’ on planning applications.
“While everyone in the property sector is keen to see growth in the number of new houses and apartments, there has to be caution to ensure that what is built is appropriate and safe.
“On the face of it, unless additional resources are provided to planning departments, this commitment runs the risk of overstretching departments which are already seriously under-resourced. A failure to meet this commitment is only going to further stretch the financial resources if costs have to be reimbursed. If such a proposal is to be considered, then there has to be consideration to ensuring that planning departments are geared up to provide the fast-track service being proposed.”
The government is listening
Kevin Whitmore, director and head of North and Midlands at Cavendish: “The chancellor’s Autumn Statement actually had more to say around planning reform than had been previously trailed. Measures to accelerate the planning process and provide guaranteed accelerated decision dates are likely to be welcomed across the board. As will mooted reforms to the Nationally Significant Infrastructure Project regime.
“With new devolution deals announced in places like Lancashire and Hull & East Yorkshire, plus new Advanced Manufacturing Investment Zones in Greater Manchester and the East and West Midlands, it seems that the government has listened to what both the private and public sectors have had to say about how to get investment moving into places across the North.
“With more than half of the population due to be covered by an elected mayor next year, it has never been more important for planners and developers to understand and react to England’s changing political landscape.”
Bill Addy, chief executive of Liverpool BID Company: “There are a few measures in this statement that are welcome news, a 75% continued discount for retail, leisure and hospitality will benefit our high streets and city centres. It will help business to create their budgets for the new year. A freeze on alcohol duty is good news for hospitality.
“But a great deal of uncertainty remains. In March, the energy scheme for business ends, meaning that there is no support for increasing bills in the next financial year. This is one of the biggest challenges facing small and independent businesses, cultural institutions and property owners up and down our high streets as energy costs and utilities are rising faster and steeper. We have to work to make it affordable to keep your doors open, to maintain vibrant city centres that service a mixed-use economy.
“We need more certainty and support that comes from an understanding of the challenge businesses in our great cities are facing, that helps them to face the future with confidence and feel that they can thrive, not just struggle to survive.”
The big elephant in the room
Richard Cook, senior director at Pegasus Group: “The Chancellor asserted that “lower tax means higher growth”. However, the latest OBR figures actually represent a downgrade on the last set of growth forecasts. As growth in 2024 has gone from 1.8% to 0.7%, it’s not clear how the government’s lower tax approach is translating into higher growth.
“The big elephant in the room, however, was how the government will address the national housing crisis. The chancellor says he will allow local authorities to recover the full costs of major planning applications, in return for meeting faster deadlines. As long as the money generated is ringfenced for planning departments, this could be positive. We can only hope that the soon-to-be-released NPPF update will shed more light on how the government plans on tackling the housing crisis.
More needs to be done by local authorities
Cllr John Merry, chair of Key Cities and deputy mayor of Salford: “The financial crisis facing cities and councils up and down the country is now too urgent to be ignored by the Treasury. Six councils have already issued Section 114 notices since 2020, and if no new funding is provided, we estimate a further 1 in 10 potentially face a similar fate over the next couple of years. We hoped for more a clear understanding from the Chancellor for how local authorities, which ultimately depend on central government, will be financially supported.
“Whilst we welcome the chancellor’s commitment to devolution deals and investment into regeneration, it is disappointing that the measures outlined today have been watered down from those teased previously in the so-called ‘trailblazer deals’ and new investment zones and freeports will inevitably create some winners but also losers. We urge the government to match its rhetoric of rewarding work and effort, and go quicker and stronger in giving local leaders the autonomy to manage their own finances and policies, in order to both address the cost-of-living crisis and truly level up all parts of the UK.”
Smoke and mirrors
Kelly Paddick, company director at Euan Kellie Property Solutions: “It’s obviously positive to hear about additional funding commitments to Greater Manchester through the investment zone – first announced in the Spring Budget – as well as the commitment of £32m across housing and planning to deliver new housing across the country, including additional funding to tackle planning backlogs in local planning authorities, but as always the devil is in the detail and so our wait continues to understand how that money will be spent.
“The chancellor seems keen to reassure us that the cancelling of HS2 wasn’t for nothing by promising to reallocate the £36 billion savings into Network North projects. However, given HS2 was cancelled to avoid spiralling debts it’s not wholly convincing that the government is really committed to spend this amount on northern infrastructure improvements. We can’t help notice that today’s announcement of £8.55 billion for the second round of City Region Sustainable Transport Settlements was already announced in the Spring Budget earlier in the year (and, indeed, is lower than the amount in Spring too…)
“As usual, today’s announcements all feel a bit too much like smoke and mirrors.”
More devolution is needed
Kate Pix, regeneration director at Genr8 Kajima Regeneration: “Although it is great to see that the government recognises the significance of financial autonomy for the West Midlands and Greater Manchester regions, we need more powers for other metro mayoralties.
“For example, places like Huyton in Liverpool City Region where Genr8 Kajima Regeneration Ltd supports the council’s transformational development plans, urgently seek clear and sustained government support. In the residential sector, this financial autonomy would enable more opportunities for required affordable housing, whilst fostering local innovation and supporting sustainable projects.
“The momentum for Levelling Up must not be lost or weaponised for political gain; we need transparent funding guidelines, timely assistance, and a commitment to collaboration for the benefit of local communities.”
A Northern viewpoint
Anna Wrigglesworth, director at CT Group: “The North is one of the regions particularly vulnerable to increases in the cost of living. So, it’s good to see that measures targeted toward the cost-of-living crisis were taken.
“Although an increase in housing allowance and universal credit is something worth celebrating, there is still an underlying issue of high house prices for people wanting to own their own homes. Whilst Hunt states that measures will be taken to increase homes through ‘high-quality nutrient mitigation schemes’, some may question the Conservatives’ track record on planning reform to encourage home building.
“I welcome the news that incentives for investment zones and tax reliefs for freeports would be extended by a further five years. And that three more investment zones focused on manufacturing will be instigated, including in West Yorkshire.
“Whilst investment zones are beneficial, when we look at the long-term growth of the North, it is concerning that the North still remains a region least exposed to the fastest-growing sectors. Given how the levelling up agenda has been rolled out so far, people will be looking for the Government to demonstrate how it will ensure that business development investment is specifically directed to the North.
“A decade on from the game-changing deal, which was struck in Manchester, I welcome the rollout of more devolution deals for the North today in Hull and the East Riding of Yorkshire, Lincolnshire and a county deal without a mayor in Lancashire. More powers to grow our own economies without reliance on Westminster enables the narrowing of the North-South divide.”
Consistent investment-led approach key to unlocking the North
Robert White, CEO of leading independent law firm Brabners: “Businesses will undoubtedly welcome the chancellor’s move towards prioritising growth. However, if we are to unlock the true potential of the regions, and particularly the North, we require a consistent investment-led approach that transcends short-term political cycles.
“We welcome the extension of the Investment Zones programme – which has doubled the length of the government’s funding commitment to cities like Liverpool, Manchester and Leeds to 10 years – and initiatives like the £4.5 billion investment to boost UK manufacturing in strategic sectors announced last week, which represents an opportunity to generate sustainable sector-led growth and to attract even more transformational inward investment.
“With further de-centralisation anticipated through the government’s trailblazer deals, it is important that purpose-led businesses continue to play their part in delivering positive change – strengthening the North’s proposition on skills, sustainability, innovation and society – in the quest to boost productivity and ultimately deliver inclusive growth and prosperity for the region.”
Good news for West Yorkshire
Keith Hardman, head of Cushman & Wakefield’s Leeds office and national head of UK development and strategic advisory: “The West Yorkshire Investment Zone announcement is very welcome. The Zone will support further growth and diversification of the region’s economy and is a genuine stimulus to attracting, developing and retaining talent. There’s little reason why the Investment Zone shouldn’t replicate the success of the Leeds City Region Enterprise Zone awarded just over 10 years ago. It brings the additional benefit of harnessing resource and adding to the further regeneration of each city centre and in supporting their sustainable growth.”
Business rate changes welcome
Richard Roberts, managing director of Roberts Vain Wilshaw: “Thankfully the government have frozen retail discount at the current level of 75% of business rates for another year. The small business rates multiplier, applicable to properties with an RV under £51,000 has also been frozen. The large property multiplier, used on properties with an RV over £51k will increase in accordance with inflation.”
Michael Allison, commercial director at Roma Finance: “The extension of the business rates relief programme will help artisan business as the high street looks to re-establish itself. We have seen an increase in regeneration projects in the region, and further afield, where traditional high street properties are being refurbished to accommodate both commercial and residential occupiers, and expect this trend to continue into the New Year.
“Plans for a consultation on changes to permitted development rights is another positive move for the residential property market as rental stocks remain low, and will give landlords an alternative to HMO for maximum yields.”
Tim Attridge, head of rating at CBRE: “The extension of the 75% Retail Hospitality and Leisure (RHL) discount and the freeze in the level of the business rates multiplier for small businesses are welcomed. However, such measures will have little-to-no impact for larger companies who will experience rates raises from April 2024 of 6.7%. The lack of support for these businesses is both surprising and hugely disappointing.
“Business Rates continue to have a material impact on retailers as they try to rebuild following the pandemic, something publicly expressed by many in recent months. Whilst other costs continue to rise, and footfall in City Centres continues to be suppressed, the lack of intervention will have a detrimental impact on the retail market and stifle store growth strategies, as well as fuelling a potential increase of business casualties in the face of these rising costs.”
Not a ‘vote-winning budget’
Lisa Wilson, head of tax at Cowgills: “By and large I don’t think it was the optimistic or vote-winning budget which most of the backbenchers had hoped for, but my feel is that any big tax announcements will be kept in the bag for the Spring Budget (I predict a corporation tax rate cut, you heard it here first!). There were some key points for the property and construction industry to reflect on.
“Business tax had been rumoured to change – which manifested into a surprise permanent extension for ‘full expensing’ of capital purchases for up to £1m, which was due to end on 31 March 2026 (although on reading the briefing notes there are some caveats to the availability of the relief)…
“From April 2024 – the current CIS regime which contains regulations that allow HMRC to rescind a construction-related business’s CIS ‘gross payment’ status where there are associated failures in Corporation Tax, Income Tax & PAYE compliance – will be expanded to include VAT compliance. A more welcome change was also announced with the removal of most landlord-to-tenant payments e.g. contributions to tenant fit-out works from the scope of CIS.
“There was also some good regional news with a new Greater Manchester Investment Zone which hopefully will deliver some significant private investment and an extension to existing enterprise zones within the city centre from five to 10 years.”
It won’t make a real difference
Steve Coffey, chief executive of Homes for the North: “There were some welcome announcements on housing in this Autumn Statement – but nothing that will make any real difference in providing the more and better homes the North needs. Housing matters to voters, with polling from Homes for the North showing that 68% of people polled across 15 Red Wall seats said they want to see new homes built in the North, and 69% of those saying housing policy will influence their voting intention at the next election.
“The government needs to be dramatically more ambitious about how to meet the challenge of making sure people have the homes they need. Homes for the North’s Plan for More and Better Homes makes clear that this situation can be turned around – but only with clear strategy, partnership with government and concerted action will the homes that people need be delivered.”
Tax relief questions
Sean Keyes, chief executive of Sutcliffe: “We will take any reduction in taxes as this is the highest tax burden in my working lifetime.
“I was disappointed not to see more about the Help to Buy ISA. Not only would this have helped first-time buyers, but it would have also benefited the construction sector as it would have encouraged people to save for a deposit which would have meant greater demand for more homes to be built. That said, I welcome the £40m investment in busting the housing development backlog and hope the Government sticks to its promise of being ‘a builder, not a blocker.’
“I also think increasing the National Living Wage is in fact a negative. While raising the National Living Wage in London may work, what it’ll do in the provinces is make employers think more closely about employing a young person, as it’d actually make more sense to employ somebody older with more experience for the same amount of money, making it even harder for young people to find their first employment – and that’s not what I want.
“What I’d prefer to see would be for the Government to put some actual funding into encouraging companies to upskill its young people, similar to the Kickstart programme, covering some of that initial cost associated with taking people out of unemployment and helping them into college and then the workplace.”
More needs to be done for the environment
Neil Baines, managing director of Steven Hunt Associates: “After the recent political turmoil and set against a backdrop of serious unrest, today’s autumn budget has put into focus the need for more support for businesses and support for individuals still affected by high energy costs. While the Chancellor has recognised the importance of the Net Zero agenda, it goes without saying that more needs to be done to demonstrate that the climate emergency and measures to help cut fuel bills are at the top of its agenda, with policies and incentives that prioritise the decarbonisation of the construction industry for businesses and for homeowners.
“Clients’ preferences are shifting towards green construction methods, and we need investment in helping people cut energy use to lower fuel bills – while the UK construction industry faces a unique set of challenges in 2024, we need to prioritise sustainability, of which this budget doesn’t do enough. With this in mind, I welcome the £4bn worth of investment over the next 5 years into more strategic investment into manufacturing with a net zero focus.”
Helen Gribbon, director at Renaissance Associates: “Once he got over the need to employ playground deflection tactics by criticising the opposition, Hunt’s statement appears to be an attempt to win back voters, with short-term measures which provide short-term benefits, though it contained some points specific to the North.
“The government’s position on energy and the limited steps to green the UK’s energy system are for some objectionable. A lack of recognition of the opportunities for jobs and the environment in this sector if they were to adopt an opposite stance shows such a lack of foresight. The UK is so far behind on this front it is embarrassing and deferring action simply exacerbates this issue. About £1m invested in green technologies and aerospace combined, is a mere drop in the ocean to what should be being invested in green technology alone. Further investment in manufacturing appears to be a significant sum, however, equates to 1% of the sector value of product sales in overall terms, and 0.175% per annum for the period in question. Not that you would say no to the provision, yet in context is a small percentage investment input…
“It would be good to understand the detail behind a number of these statements and the mechanisms for implementation prior to forming a final judgement. With the tax burden being at a post-war high, are there some cultural and societal changes needed in order to make the steps required for a more robust future economy which will benefit our region? And will this be better served with a truly devolved power, so we can get things done and not mind who gets the credit for doing them?”
A bit more about energy infrastructure…
Simon Ferenczi, managing director of Sol Acoustics: “The government’s new initiative to incentivise energy infrastructure near existing residential properties could well be viewed in a positive light (given the dual needs to improve the country’s energy infrastructure generally, and move to renewable power sources which tend to be smaller and embedded within communities).
“However, the need for environmental mitigation – particularly environmental noise arising from the operation of such plants – is similarly further underlined, especially if noise sensitive housing is in ever close proximity to such facilities.
“Prior to this latest announcement, there were more limited concession allowed in respect of the guidance for supporting energy infrastructure close to residential receptors. It is very important that the need of the country is correctly and sensitively balanced with the wellbeing of residents. Certainly, the role of the Environmental and Acoustic Consultant will be key in achieving this balance and successfully delivering all such schemes.”
Smacks of political desperation
Angela Mansell, managing director of Mansell Building Solutions: “There’s more than a smack of political desperation in the chancellors autumn statement.
“Coming weeks after the Manchester leg of HS2 was cancelled, the budget offers scant consolation for us operating in the North. While there were some positives in the extension of the investment zones scheme, you can’t help but feel the North deserves more. After positive movements towards the levelling up agenda in the Autumn 2022 statement, it’s disappointing to see that positive momentum fizzle out.
“It’s not all negatives, the rise in minimum wage will be positive for many. An unforeseen result may be some added pressure on property and construction, with the price rise hiking up input costs for projects across the board.
“What’s more, the budget doesn’t address the gaping hole in our production of new homes. That once golden target is fading further and further into the background. As we’ve repeated before, we have to turn words into action to overcome the housing challenge. That means changes to the way we’ re currently operating and there’s nothing in this statement to bring about the changes needed.”