Here at Ethex we were watching the Autumn 2017 budget announcement with interest. In the lead up to today’s proceedings there had been lots of media commentary about this being a budget to promote social investing and one which focused firmly on the needs of the next generation.
What we got in the end was a budget that still maintained a commitment to social investment with the Enterprise Investment Scheme remaining unchanged (and indeed the EIS limit doubled for knowledge intensive companies) and an increase in the Social Investment Tax Relief (SITR) threshold from £300,000 to £1,500,000 (which had been announced on the 18th Nov) – effectively allowing eligible investors to claim a 30% tax relief against investments they make into social enterprises. However, there could have been much more in the budget to help promote growth in the social investment space, especially given a whole host of policies options which were outlined in a recent report called ‘Growing a culture of social impact investing in the UK’ which was recently released.
The government has also committed to supporting increased competition in banking, and the Budget sets out further actions which will enable innovation in banking services, strengthen challenger banks, and improve access to affordable credit for consumers. These include measures to promote open banking and to promote credit unions.
Lisa Ashford, CEO, Ethex said “The Autumn budget promised a lot and whilst we welcome continued support for the social investment sector through tax efficient initiatives like EIS and SITR – there was the opportunity for the Chancellor to go much further.”
“With the forecast for economic growth continuing to be lower than expected, individuals and families are increasingly going to feel the squeeze. Social enterprises continue to do good work across the country helping to address many of the problems that society is currently experiencing, but to do this effectively they need investment.”
The budget also tried to tackle some of the problems affecting millennials and as predicted – housing featured prominently. Some of these policies included the abolishment of stamp duty for first time buyers up to £300,000, increasing house building to 300,000 homes by 2020 and setting up a homelessness task force. What remains to be seen now is how effective some of these policies are in dealing with homelessness and a housing market that doesn’t make it easy for first time buyers to get onto the property ladder.
In addition, there were also a number of other policy measures including a slight increase in the living wage, funding for electric vehicle charging infrastructure and a package to help address concerns about the delivery of Universal Credit. Other initiatives designed to appeal to the younger generation really were limited to the young person’s railed card which was extended from 25 to 30 year olds.