Five things to expect from Sunak’s Autumn statement
As Chancellor Rishi Sunak (pictured) prepares to deliver his second Autumn budget statement, he is facing a thankless task.
After the unavoidable expense of the government’s Covid relief schemes, Sunak will be under pressure to balance the books – presumably via tax hikes. Yet the economy is still in the early stages of recovery, and many business experts and lenders have been lobbying for new lending schemes and additional funding to help ease us through the next stage of the pandemic.
We already know that the chancellor plans to extend some support measures, increase the living wage and unfreeze public sector salaries. But what else can we expect from tomorrow’s budget speech?
1. The recovery loan scheme will be extended
Following pressure from traditional and non-bank lenders, Sunak has already confirmed that the recovery loan scheme (RLS) will be extended past its original deadline of 31 December 2021. So far, 77 lenders have authorised funding of more then £1bn to UK businesses through the scheme, and the British Business Bank has been approving new RLS lenders on a near-daily basis. This will offer some relief to newly-authorised lenders who are sifting through a huge pile of funding applications.
2. New housebuilding initiatives will be introduced
The alternative lending sector has been very vocal when it comes to increasing support for housebuilders across the UK. During the three nationwide lockdowns, many building sites were left at a standstill, while supply chain issues continue to disrupt property development timelines.
Earlier this week, both Assetz Capital and Shawbrook Bank urged the chancellor to loosen planning laws to allow for more housebuilding activity in order to meet the growing demand for new homes. Some reports have suggested that Rishi Sunak will announce a £1.8bn packet to fund up to 160,000 greener homes, built on brownfield sites.
3. An angel investor pool will be launched
£150m in funding is expected to be announced for a regional angel investor programme. The money would be used to boost small businesses outside of London, and to ensure that new companies get access to the early stage funding they need to get off the ground and grow. This would be particularly beneficial to those small- and medium-sized enterprises (SMEs) which have been treading water over the past 20 months, and need a shot of capital to fund their scale-up plans.
4. New green investment initiatives may be mooted
Sunak’s green bonds scheme was famously oversubscribed, and another set of green bonds is expected to be announced. But with Cop26 just a few days away, the chancellor has hinted that he is keen to crack down on greenwashing and to introduce new incentives to encourage greener investing.
Earlier today, business finance aggregator Funding Options led a call for the government to introduce discounted green loans for SMEs, and to create a £1bn pot for ESG investments.
5. A lifting of IFISA limitations
A peer-to-peer pipe dream? Perhaps. But Innovative Finance ISA (IFISA) managers are hoping that the chancellor will bring IFISAs in line with the rest of the ISA market by allowing investors to open more than one IFISA per financial year.
The annual ISA allowance is expected to remain unchanged at £20,000, but against a backdrop of rising inflation and low interest rates, savers and investors will be hoping for some form of tax-free relief.