Member Article

North East Business Leaders comment on Autumn Statement

Business leaders from the North East have given their reaction to George Osborne’s Autumn Statement.

Institution of Civil Engineers (ICE) Director General, Nick Baveystock, said: “Clearly government has heeded the advice of many across the industry to increase capital expenditure on infrastructure and get ‘shovel ready’ road schemes moving – demonstrating to investors that the National Infrastructure Plan is leading to visible activity. The danger however, as with the £5bn capital boost announced this time last year, is that this will fail to materialise and breed further scepticism. The Highways Agency’s will have a crucial role to play here, accelerating the delivery of the schemes while still ensuring they deliver value for money.

“Progressing short term projects to stimulate jobs and growth is vital, but it is important to remember that the NIP was intended as a long term plan, with 70% of investment to come from the private sector. We’ve seen a raft of potentially useful initiatives to help facilitate that - around pensions, planning, guarantees, ownership and funding arrangements and we also now have a pipeline of future projects. We in the industry need to keep a close eye on how these initiatives are progressing and be ready to work with government to propose new ideas if they aren’t working.

“I’m therefore pleased that Paul Deighton’s first duty as a Treasury Minister will be to be produce an assessment of Whitehall’s ability to deliver infrastructure and look forward to contributing to this review.”

Commenting on the economic growth elements of the Chancellor’s statement, Stephen Catchpole, Managing Director of Tees Valley Unlimited, the local enterprise partnership for Tees Valley, said: “It is pleasing that the Government agrees with the views expressed by Lord Heseltine in his recent review that Local Enterprise Partnerships should be further assisted in their role as the engines for delivering growth on the ground.

“We welcome the single pot funding approach for transport, housing and skills.

“Tees Valley will be enthusiastically bidding for the resources that are to be made available when the details of the competitive process have been announced.”

Steve Grant, Managing Director of The TTE Technical Training Group, said: “I was hoping for a more imaginative statement that would stimulate business and the UK economy, generating jobs and giving people hope and opportunity.

The £270million to be invested in FE Colleges would be better spent on incentivising manufacturing companies to take on apprentices – particularly in engineering where there is a huge skills gap. However, I would urge the Local Enterprise Partnership, which can support employment and skills in the Tees Valley through accessing a single pot of funding announced by the Chancellor, to prioritise apprenticeships as they will make a huge difference to the skills requirement of the Tees Valley.“

Welcoming the Chancellor’s statement that he was creating a tax environment in which investment would not be discouraged, Norman Peterson, co-founder of equity based crowdfunding platform growthfunders.com, which is due to be launched in the new year, said more could be done:

“Entrepreneurs and small businesses are the lifeblood of the UK economy but the prevailing economic climate, coupled with the reduced accessibility of traditional funding sources, is conspiring to stifle start-ups and growth businesses.

“Alternative sources of finance, including crowdfunding and peer-to-peer lending, are gathering pace and both have the potential to significantly contribute towards business growth and job creation.

“Clear government policy and backing will be instrumental in facilitating this and we would like to see a range of measures which enable this marketplace to mature in a professional manner. Crowdfunding has the potential to become mainstream and could prove to be a valuable source of match funding to unlock more traditional finance solutions and stimulate economic growth.

“The USA has taken the necessary steps to facilitate and stimulate economic growth. The JOBS Act (Jumpstart our Business Start-ups) has been passed and comes into force in January 2013. The Act gives clear guidance on how crowdfunding can directly impact and support business start-ups and growth. The UK needs to take a lead from the US to create and facilitate the same opportunities for our domestic market, if not we run the risk of being left behind in this innovative and rapidly emerging marketplace.”

John Elliott, chairman of Ebac, contributed: “The Chancellor’s analogy that the British economy is ‘healing’ sounds encouraging, but this is just sticking plasters on the symptoms, rather than addressing the underlying problem.

“The Government cannot continue borrowing money it doesn’t have from other countries, to buy those nations’ exports. We are perfectly capable of domestically manufacturing many of the goods we consume here in the UK, yet we insist on importing them. If we exported an equal value of goods, then it would not be a problem, but we do not.

“It makes little or no economic sense to continue like this, especially when the answer is as simple as taking people out of unemployment and making some of the things we currently import. The cost would be no more than the tax payer is currently paying out on benefits for these people.”

George Rafferty, Chief Executive of energy sector business development organisation, NOF Energy, said: “The UK is world renowned for its innovation, skills, products and services, which are utilised around the globe. The increase in the funding for UKTI can only serve to further increase the UK supply chain’s presence in global markets, which is essential in ever-increasingly competitive economies.

“These companies will also benefit from the ten-fold increase in tax relief on the purchase of plant equipment and machinery, which will encourage growth and further investment in operations.”

He added: “The Government is committed to ensuring the creation of a balanced energy mix, which places oil & gas at its heart and will benefit from the increasing use of energy from renewable sources. Investment has to be made across all areas of the energy sector, including gas, to ensure that balance, which will also create opportunities for supply chain companies.”

Ruth Roddam, owner of SAKS in Darlington, said: “The Chancellor’s aims to extend business rate relief to 2014 are encouraging to hear. Plans for investment into infrastructure and manufacturing are also positive moves, as this will create jobs, providing people with more income which will hopefully filter down to the high-street and increased purchasing of commodities and services.”

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