Member Article

North East responds to Budget

After yesterday’s Budget speech, business commentators in the North East offered their opinions on the announcements. The general feeling was a resigned acceptance that the Chancellor hadn’t quite done what was needed.

James Ramsbotham, chief executive of the North East Chamber of Commerce said: “Alistair Darling promised a lean, mean and green budget focused on job creation but he has not gone far enough.

“There was support for workers losing jobs but not enough to keep people in jobs such as short-time working compensation scheme and retaining staff hire concession.”

Colin Stratton, FSB Regional Chairman for the North East of England, said: “We are deeply concerned by the Budget that has been released by the Chancellor. “We have a miss-mash of reformulated announcements and nothing that is fresh and helpful to the SME community. The Chancellor, who had a real opportunity to assist small businesses and come out fighting, has failed small businesses in the region hugely.

“A lack of concessions for small businesses is apparent and the FSB will be seeking urgent meetings with BERR and CLG to seek why more was not achieved for the small business community within this Budget.”

Alan Hall, Regional Director of manufacturers’ organisation EEF, said: “Given the most difficult economic conditions for a generation, the Chancellor has gone some way towards alleviating the short term pressures facing companies. The measures on investment, trade credit, low carbon technologies and car scrappage are helpful though he should have gone further to make a real difference. However, the growth forecasts look overly optimistic and there is a serious danger that business will pay the price in higher tax if growth falls short.

“Manufacturers will also be disappointed that the Chancellor has hit them with the double whammy of failing to provide support for short time working whilst increasing the costs of redundancy.”

Financiers find benefits

Stephen Hall, tax partner at Deloitte in Newcastle, said: “The Budget is full of lots of headline-grabbing measures, however, many of them will actually apply to relatively few people. This is of little surprise, given that we knew that the Chancellor had little to play with, and it is surely right that it is the individuals most in need who will benefit.“The top rate of income tax will rise to 50% for the 350,000 people earning over £150,000, and apply from April 2010, which is a surprise. At the same time, those earning over £100,000 will lose all personal allowances - which will cost some 700,000 people around £220 per month.

“For businesses the reliefs announced are modest. The £50,000 loss relief rule will be extended for a second year - allowing loss-making businesses to recover tax paid in the three previous years. However, the refund for a company is only £10,000 - so not a huge help.

“There are important new powers in relation to tax evasion and tax reporting. There will be a defaulters list, to name and shame those who deliberately evade tax of over £25,000. Separately, finance directors will need to take personal responsibility for company tax filings.”

Tim Porter, head of tax at PricewaterhousCoopers in Newcastle, said: “The Chancellor has announced a number of tax and incentive measures which are designed to stimulate the economy. While we welcome this, we had hoped he would go further. In addition, where economic growth will depend on businesses investing in the UK, we are concerned that increases in income taxes will make the UK a less attractive location in which to base entrepreneurial business.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .