Business community gives broad welcome to Budget - but says questions remain

Business groups in the North East welcome measures on tax and investment, but want more action on transport improvements

George Rafferty, Chief Executive of NOF Energy, the business development organisation for oil, gas, nuclear and offshore renewables sectors
George Rafferty, Chief Executive of NOF Energy, the business development organisation for oil, gas, nuclear and offshore renewables sectors

Business groups have given a broad welcome to the Budget, but warned that some of the most pressing issues facing the region had not been addressed.

The North East received few mentions or specific promises in Chancellor George Osborne’s speech, though measures including corporation tax reduction, help for the oil and gas sector and support to increase exporting were all positively received.

There was a welcome too for £1m pledged to the Redcar-based Centre for Process Innovation to boost the chemicals industry in the North East and a funding package to market the region’s tourism industry in Scandinavia.

The North East Chamber of Commerce said the budget was “relatively positive” while manufacturers’ organisation EEF said that “the Chancellor gets three cheers from manufacturers”.

But vagueness around actual commitments to devolution or transport improvements for the North East were highlighted as a cause for some concern by firms in the region.

Ross Smith, director of policy at the Chamber of Commerce, said: “There have been several positive announcements made by the Chancellor.

“The elimination of National Insurance payments for under 21s and the abolition of the annual tax return will make life much easier for our smaller business members and contribute to the positive employment figures released on Wednesday morning.”

He added: “While there have been promises made around business rate reform, annual investment allowances and northern transport, we are yet to see action.

“Actions speaking louder than words and these issues need to be addressed as a matter of urgency by whoever is in the Treasury after the election.”

Liz Mayes, North East region director at EEF, said: “The Chancellor gets three cheers from manufacturers today, particularly for the measures he included to boost exporters.

“His decision to bring forward compensation for industries facing vast and uncompetitive energy costs, such as steel makers, is also welcome but the full package needs to be put in place as soon as possible.

“In addition he has committed to a stable and competitive tax regime, which we wholeheartedly support and which should go down well with local businesses.”

Mrs Mayes also welcomed measures to help the oil and gas industry, additional support for exporters and called for the review of the business rates system announced earlier this week to produce a fairer system for manufacturers.

Ted Salmon, North East regional chairman of the Federation of Small Businesses, added to the calls for more details on transport improvements in the region and said his members would have liked to see more support specific to the North East for technology clusters.

But he added: “Our members will be encouraged by many of today’s announcements.

“The review into business rates is long overdue. When complete, it must deliver tangible benefits to businesses and not end up as just another report that sits on the shelf.

“His commitment to raise the Annual Investment Allowance to an appropriate level will provide the certainty needed for businesses to plan and invest - something badly needed if the UK is to raise its productivity.

“We are especially pleased that the idea for a single digital tax account is being taken forward. This is something we have long advocated – featuring prominently in our 2015 Business Manifesto.

“Implemented properly, this should reduce the time businesses take to complete their tax returns, and offers opportunities to deliver targeted support. The abolition of Class 2 National Insurance contributions for the self employed is also a welcome step.

“There were some helpful measures to help with getting connected. The extension of the superfast connection vouchers will help small businesses in more urban areas. We look forward to reviewing the details of the new digital communications infrastructure strategy.

“Access to superfast services is a key requirement for small businesses. Delivery of this strategy will be critical to future-proofing the national economy.”

In the farming sector, the NFU welcomed the Chancellor’s decision to allow farmers and growers to average their incomes over five years for tax payers to cope better with volatility in food markets and differing yields.

NFU president Meurig Raymond said: “We are very pleased that Mr Osborne said that he had listened to the NFU and will allow farmers to average their incomes over five years. As he mentioned in his speech, farmers are increasingly facing a volatile marketplace and this will enable them to manage the impacts of this.

“News that the annual investment allowance will be addressed in his Autumn Statement is also welcome.”

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