Partner Article

North East business leaders give their opinions ahead of Autumn Statement

Business leaders in the North East have given their opinions ahead of the Chancellor of the Exchequers’ Autumn Statement on Thursday.

George Rafferty, Chief Executive of NOF Energy, the business development organisation for oil, gas, nuclear and offshore renewables sectors with more than 440 members, believes the Autumn Statement provides the ideal opportunity for the Government to signal its intentions to support the development of the onshore gas industry.

George said: “While oil & gas will remain at the core of our members’ activities, the supply chain will be looking on with interest at any announcements in the Autumn Statement relating to the emerging onshore gas market. There are considerable transferable skills and technologies developed by the supply chain for the offshore sector than can be effectively applied to the recovery of onshore resources such as shale gas.

“To enable this to happen, the Government need to create an attractive investment landscape through the introduction of tax incentives that allow the sector to really start to establish itself and allow operators to create to a robust supply chain made up of existing, technology-led companies.”

James Gill, an employment expert in UK specialist manufacturing, is encouraging the Chancellor to use the Autumn Statement to provide targeted funds to address short and medium term skills shortages being faced by growing sectors to enable engineers to transfer between industries.

James said: “While much of the skills agenda has been focused on resolving youth unemployment, this is part of a long-term strategy and a greater emphasis has to be placed on the short and medium term issues facing industries with current and impending skills gaps due to ageing workforces.

“The Autumn Statement is the ideal opportunity for the Chancellor to allocate funds to support the transition of engineers and technical specialists whose high-level of skills and experience makes them extremely attractive to sectors such as chemical manufacturing, oil & gas and the power industry, which require an ever-increasing number of skilled personnel.

“This will not only support those looking to move from declining industries such as ship building and the military, but also those keen to transfer to industries that are experiencing considerable levels of growth.”

Waltons Clark Whitehill, the Tees Valley-based firm of chartered accountants and business advisers, is urging Chancellor George Osborne to extend an allowance which could revitalise empty business premises.

George Hardey, senior tax manager at Waltons Clark Whitehill, said: “Extending the Business Premises Renovation Allowance to the whole country can make a difference to the viability of properties up and down the area.”

George said: “Why limit this tax relief to certain geographical areas and industries? There are commercial premises up and down the country which could be revitalised if they were given the same incentive. Consideration should be given to extending the BPRA to apply to most high street premises. By helping to create high quality places for people to do business and bringing consumers back into struggling high streets, it would encourage people to utilise these buildings, benefiting the local and wider economies.”

Nigel Mills, chairman of the Entrepreneurs’ Forum said: “Further incentives for individuals to invest in start-up businesses would be very welcome in the Autumn Statement. I would like to see such initiatives as Enterprise Investment Schemes extended to help nurture entrepreneurial spirit in the North East. Smaller companies play a major part in job creation globally and the North East needs these entrepreneurial businesses to thrive to help it improve its levels of employment.

“Additionally, increased investment in mentoring can play a very important role in the economy. Statistics show that 70% of those new companies which benefit from mentoring last more than five years, compared with 35% where the business leader is not mentored.”

Paul Moore, Group Managing Director said: “In June, the Chancellor delivered a positive, but cautionary Budget and this needs to be followed up at the Autumn Statement. However, there are some unintended consequences of the positivity in the market which need addressing, because of the financial uncertainty in programming they are creating for contractors.

“Throughout the supply chain, shortages brought about by the steady return to health of the construction sector are resulting in demand outstripping supply in many areas. An example of this is in materials, such as bricks. When the downturn hit, kilns closed, but they have not been re-opened. This means the number of bricks being produced has not been increased to meet current demand, so costs have risen dramatically.

“Without some form of action to stabilise the situation it is impossible for people building affordable homes to price a job with any certainty, and there is no going back because our contract costs are fixed, unlike with those building private homes.

“A focus also needs to be placed on skills because when construction took a major blow in the recession people migrated from the industry, retraining into other sectors or even moving abroad looking for work. The industry lost a lot of capacity and experience, and those people are not coming back. We need more training to fill that gap and it will be a slow process, but without that push on skills businesses within the sector will not be able to achieve their potential.

“The growth we are seeing is welcome, but consideration of the issues which surround it need to be carefully considered.”

Richard Farr, Partner at Sanderson Weatherall, which has offices in the Tees Valley and Newcastle, said: “The business rates system is not broken. Where problems are arising is where Government is making changes which simply do not benefit business, and a reversal of the proposal to defer the timings of the rebasing of rateable values should be seriously considered.

“For decades, this has been done every five years and the next revaluationwas due in April 2015, based as always on figures from two years previous. However, this has now been changed, apparently arbitrarily, and will not happen until April 2017, meaning another two years of rateable values based upon 2008, when the High Street and other parts of the market were at a peak. This may benefit the Treasury’s coffers, but not businesses. Surely, it is better that taxes are raised by businesses operating in an environment which allows them to grow, rather than businesses paying higher rates and struggling to survive.”

Jeremy Middleton, Chief Executive of Middleton Enterprises and Board Member of the North East LEP, said: “The key announcement for me will be an update on the creation of a new, national business bank. The North East is an extremely enterprising region, with strong exports. One of the main constraints of growth in the area is the lack of available finance for business owners who want to invest and grow their companies and difficulties in accessing traditional overdrafts for working capital.

“I would like the Chancellor to take this opportunity reassure North East entrepreneurs that a reasonable amount of available finance from the business bank goes into SMEs in the regions.”

Mike Odysseas, Managing Director of telecommunications firm Odyssey Systems, said: “I would like to see the Chancellor review the subsidies Government is handing over to BT as an incentive to roll out super-fast broadband. The scheme is fundamentally flawed and hundreds of millions of pounds of tax-payer’s money is being spent on this scheme – which BT would, in all likelihood, have completed in most of the areas anyway, albeit at a much slower rate.

“The scheme is also wholly unnecessary as every community can already access high speed internet through satellite – and homeowners do not really need super-fast broadband, proven by the fact just 20 per cent of homeowners choose to access the high-speed service.

“Instead, the money should be targeted at areas with a high concentration of businesses, which would give a real helping hand to small businesses in a recovering economy, as they would save money and increase productivity.”

This was posted in Bdaily's Members' News section by Recognition PR Business Team .