What does the Budget mean for NW businesses?
North West businesses and organisations have reacted positively, in the main part, to the Chancellor’s Budget statement on Wednesday.
George Osborne repeated previous sentiments proclaimed by the Conservatives that “Britain is open for business.”
Industries in the region should benefit from the changes made, including a lowered corporation tax of 20% by April 2013, an extension of the capital gains holiday and new measures on tax avoidance.
Dr Brian Sloan, chief economist at the Greater Manchester Chamber of Commerce, commented: “There were a number of investment incentives announced, particularly for the shale gas and aerospace industries, which should help businesses in those sectors here in the North West.
“The announcement of the Employment Allowance will also offer some help for small business to reduce the cost of employing staff and ultimately the cost of doing business which we urged the Chancellor to look at in our Budget submission.
“We were disappointed that the Chancellor didn’t outline further infrastructure investment from the £3bn of departmental savings and we are concerned that next month all businesses will feel the brunt of a rise in business rates - which has gone up by 13% in the last three years - with no obvious mention of any assistance with regard to this.”
The Chamber’s sentiments were echoed by North West Business Finance, which manages evergreen investors, The North West Fund.
Chief executive, Cliff Mayor, said: “The Chancellor’s promise of the lowest corporation tax in the Western world from 2015 is positive news for North West entrepreneurs. Cutting the tax to 20% will free up more cash for business owners to invest, stimulating growth.
“The new employment allowance will reduce the National Insurance bill for every company in the country. This should incentivise businesses to take on additional staff, allowing them to achieve their ambitious growth plans.
“Another area that will be beneficial for smaller businesses is the 10% tax relief on R&D. Developing new technologies or products requires large investment, so it is essential that businesses are encouraged to do this.
“There is an element of disappointment that little or nothing has been done by the Government to address the amount of red tape that is currently hampering businesses and their growth aspirations.”
David O’Leary, tax partner for the North West branch of Deloitte added: “Overall, this is a positive Budget for business, particularly given the backdrop of the fiscal deficit. It gives more than it takes away and, crucially, North West companies should notice the difference.
“An important announcement for the North West is the investment incentives for shale gas. This form of energy offers huge opportunities for the region but it means large capital expenditure before we get anywhere near the level of shale gas usage that the US enjoys. The Government, therefore, is right to incentivise those firms that will be investing in this form of energy, which could create thousands of jobs.”
Mr O’Leary went on to praise the 10% tax relief given for R&D, as well as the £2,000 cut to businesses’ National Insurance bill which he said will particularly help SMEs.
He continued: “Finally, the freezing of fuel duty, which was expected to rise in September, is a welcome boost for those North West businesses with fleets to run. Fuel is a huge cost for hauliers, delivery firms and other businesses.”
Hillary Griffin Senior Tax Consultant at DSG chartered accountants in Liverpool added: “Despite the growth forecast for next year having been slashed by half, making it clear the government predicts only modest growth at best for the next five years, today’s pro-business budget announcement is creative and does provide tangible evidence that business growth and innovation is a priority and is being actively supported.
“The emphasis on supporting small and medium enterprise is also a key step in the right direction and one that will be welcomed by SME’s based in Merseyside and the North West. Concrete measures such as the new Employment Allowance will prove particularly beneficial.
“The news of the substantial £3bn boost to infrastructure projects in the UK, including the Mersey Gateway, is particularly good news for Liverpool and will help to encourage continuing expansion and the renaissance of the region.”
Howard Hopwood Deputy Chair of the Cheshire & Warrington LEP also commented: “Cheshire and Warrington has strengths from both an employment and output perspective in manufacturing, pharmaceuticals, automotive, chemicals, nuclear and energy and financial services. In addition we look forward to receiving more information about the Single Local Growth Fund.
“It is imperative to retaining our major employers in Cheshire and Warrington and to winning new investment that we have increased devolution of economic powers. It is encouraging that government is giving local places the autonomy and powers they need to deliver growth.”