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Manufacturers left wanting more, as start-ups are boosted

NORTH East manufacturing leaders criticised the Chancellor yesterday for missing the opportunity to help the beleaguered sector power the nation through the recovery.

Meanwhile the region’s start-ups had more reason to be positive as George Osborne delivered a number of measures to aid their growth and speed the expansion of their workforce.

Business leaders will also be waiting in anticipation for further details of a new regional growth fund, mentioned briefly by Mr Osborne in his emergency budget yesterday.

In recognition of a North South divide, the Government said it would allow firms set up outside London and the South East in the next three years to be exempt from employer national insurance contributions, up to £5,000, for each of the first 10 employees recruited.

A 1% annual drop in corporation tax for the next four years, a drop in small companies tax to 20% and an increase in VAT to 20% were also pulled out of the red case yesterday.

Alan Hall, regional director of manufacturing body EEF, said: “In recent weeks, manufacturers had been encouraged by strong commitments from the Prime Minister and the Chancellor on the role of manufacturing in a better balanced economy. They will now be left wondering where the necessary growth and investment will come from, given the cuts to investment allowances and capital budgets.”

Phil Kite, managing director of County Durham engineering firm Astrum, said: “Our overall view is that the budget hasn’t gone far enough to rebalance the economy. There wasn’t enough in terms of sponsoring investment in manufacturing. Things balanced themselves out and it was reasonably neutral.”

Geoff Ford of manufacturer Ford Aerospace, which makes components in the North East, said: “It certainly didn’t go far enough and he only mentioned manufacturing once, which is a bit limited. I had hoped for a manufacturing led recovery as we can create regional wealth. The UK is the sixth largest manufacturer in the world and that can be built on.

“He should be encouraging investment in technology – that’s the future. Engineering will never be as labour intensive as it was in the past but it requires more skills.”

For small businesses and budding entrepreneurs looking to launch their own empire, there were a number of potentially positive decisions made by the government.

“The widely touted announcement on the freeze on National Insurance contributions for new businesses taking on staff in the North East is supported but we believe the Chancellor could have gone further. There are many established small businesses that are looking to take on new staff that will be excluded from this,” said Simon Hanson, North East policy manager at the Federation of Small Business.

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