Chancellor's autumn statement welcomed by timber trade

The Timber Trade Federation (TTF) has welcomed chancellor George Osborne’s ambitious programme to stimulate the economy by large-scale new investment in infrastructure and housing, along with help for small businesses.

Mr Osborne’s autumn statement today includes a £40bn National Loan Guarantee Scheme to underwrite loans to small- and medium-sized businesses (SME); £1.2bn spending on schoool buildings; and £5bn new spending on infrastructure over three years. The government is negotiating with two UK pension funds on unlocking a further £20bn for infrastructure spending.

Mr Osborne also said the Office for Budget Responsibility had forecast that the UK would not fall into recession, but growth has been revised downwards.

“The chancellor’s announcement on infrastructure investment should provide a welcome boost for all firms involved in the construction sector, particularly the timber and wood products which are a vital component for every stage of project development,” said TTF chief executive John White.

He also welcomed the government underwriting £20bn of SME loans.

“The timber and wood products supply chain – worth roughly £18bn annually to the UK economy – is made up almost entirely of SME businesses and forms a vital part of our low-carbon manufacturing and construction sectors. We welcome this extra safety net for our members.”

Mr White said the measures, along with last week’s new housing strategy and the Green Deal proposals, had the potential to provide the vision and reality for a vibrant low-carbon construction sector with natural, low-carbon products at its heart.

The chancellor said no government had previously attempted anything as ambitious as its National Loan Guarantee Scheme for SMEs, in order to ease credit. The £40bn scheme involves £20bn help in the next few years for companies with turnover under £50m, effectively helping businesses secure a 1% reduction in loan interest rate.

A further £1bn finance partnership for medium-sized businesses was also announced. The enterprise guarantee scheme will be extended to include companies with annual turnover of up to £44m, and the Metro Bank has been accredited as an additional lender,

The chancellor promised the UK would build 500 infrastructure projects in the next decade and beyond, with £5bn of funding over next three years and a further £5bn in the following spending period.

Some 35 road and rail schemes were today given the go-ahead (including Tyne & Wear bypass), tolls on the Humber bridge are halved, a new crossing over the Thames promised and the Northern Line underground extended to Battersea.

“This all amounts to a huge commitment to overhauling the physical infrastructure of our nation,“ the chancellor said.

The 3p fuel duty increase in January has been cancelled but a 3p rise next August will go ahead. The government will also pay to cap next year’s rail fare increases.

Other measures include consultation on further labour market deregulation, simplifying tax codes for business and consulting on merging operations of income tax and national insurance.

The enterprise investment scheme is being extended until April 2012 to help start-up companies, with new businesses (under £100,000 turnover) eligible for 50% income tax relief and capital gains tax waived for a year.

A one-year extension to business rates relief holidays (to April 2013) is expected to help 500,000 small firms. Large companies can defer 60% of business rate increases over the next two years.