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News Release

JLL UK comments on Autumn Statement business rates and infrastructure announcements

​November 23rd 2016 - Commenting on the Chancellors announcement on business rates in today’s Autumn Statement, Tim Beattie, Head of Rating, JLL UK, said: “Across the UK and particularly in London, businesses will be very angry at the news that the government has ignored their demands to dramatically improve the transitional arrangements outlined in the government’s recent consultation paper by only reducing the year 1 cap from a whopping 45% to an equally eye watering 43% when the equivalent figure for the three previous revaluations was a far more manageable at 12.5%.

“Business will however welcome the news that there will be a new 100% business rates relief for new full-fibre infrastructure for a 5 year period from 1 April 2017 which will help to support the digital roll out to more homes and businesses.”

Jon Neale, head of UK Research, JLL, added: “In the Capital, changes in business rates are likely to hit areas such as Shoreditch and Fitzrovia hardest - precisely the areas where innovative tech companies are located. Indeed, the impact will no doubt undermine government plans to boost tech investment under its ‘Industrial Strategy’ announced earlier this week. Meanwhile, office costs are high in London and post Brexit we need to minimise the risk that companies, will see cheaper continental cities such as Berlin as better bet place to set up shop.”

On infrastructure and innovation announcements, Jon Neale further commented: "Chancellor Philip Hammond's announcement of a £23bn national productivity investment fund represents a very welcome focus on some of the British economy's longstanding weaknesses: infrastructure and low levels of spending on Research & Development. While the UK was recently rated the world's seventh most competitive economy, it was rated only 24th for infrastructure. According to the OECD, R&D funding amounts to only 1.7% of GDP, compared to 2.7% in the US, 2.8% in Germany and 3.6% in Japan.

“While £1.3bn to improve roads and ease congestion is welcome and is likely to unlock development sites and promote economic development in many parts of the country, if the UK is to really address the challenges and opportunities of Brexit investment in infrastructure needs to be more ambitious as well as more focussed on an increasingly digital, hi-tech future. Green and smart city technology, new tram and underground networks and truly high-speed broadband would help provide precisely the platform UK business needs.

"We also need to see a real commitment to regional devolution - city-regions are best placed to make decisions about how and where to spend money to address skills and infrastructure gaps and help business and innovation flourish in their areas. The new fund earmarked for R&D will be directed towards the development of innovation hubs that bring business together with universities and start-up entrepreneurs, to help bring new products to the market effectively. This would help us produce the world-leading companies of the future."

“The package for the development of 5G and improving connectivity is overdue and necessary, but it is not just rural areas that suffer from this. Parts of Central London have poor internet connection which isn’t compatible with the growth of tech industries we are seeing in the capital.”

James Finnis, head of South East Office Agency at JLL said: “The Chancellor’s proposed formation of a ‘tech corridor’ between Oxford and Cambridge is both welcome and achievable and will be of huge financial benefit to the local economies of both cities, as well as the wider UK plc.

“Improving connectivity between the two cities via the imminent Expressway is an important step to achieving this and continued investment in infrastructure and local amenities in and around these two cities is vital to ensuring the ‘tech corridor’ can capitalise on the surrounding highly-educated demographic.

“While both robust cities in their own right, collectively drawing on their strengths will ensure they remain competitive on a global scale and attractive to a host of multi-national organisations.”