Budget reaction snapshot from North East businesses

A snapshot of North East business figures’ overall opinions on the Budget 2014.

David Elliott, tax partner at KPMG in Newcastle, said : “The Chancellor delivered a Budget today which put the SME community firmly at the centre of future UK economic growth with a stream of measures to help them invest, innovate, grow and export.

“The Chancellor has listened to the SME community by doubling the Annual Investment Allowance, and from next month businesses will get 100% tax relief in year one on investment in plant and machinery up to £500,000. This relief isn’t due to expire now until the end of 2015 giving a longer term incentive for SMEs to invest and expand their businesses.

“For those SMEs who do more than make, but also innovate, the increase in refundable R&D tax credits will give these businesses more cash to invest during their early years before they achieve profitability, which can deliver vital funding for the high tech sector in particular.”

Andrew Moorby, managing partner at Tait Walker Chartered Accountants said: “For a region that remains reliant on public sector jobs and benefits, including those paid to people in employment but on low wages, the continued cuts are going to have an adverse impact on many local people and the regional economy.

“There were a number of positive measures that will help local businesses in terms of training (expansion of the apprentice scheme), fuel costs (carbon price floor) and company funding (continuation of the SEED enterprise investment scheme) and to promote capital expenditure (enhancements to the annual investment allowance). These various measures will help local businesses and so are to be welcomed.

“In general, however, our local economy lacks the vibrancy to attract and retain enough top talent and investment to stimulate growth. We need to create more new jobs and these must be more secure and of a higher quality. If we can achieve this it will give more people confidence for the future which in turn will attract investment, create jobs, attract more people to the region and so the cycle would continue. Unfortunately there was little in the Budget to stimulate this cycle for our region over any other in the UK.”

Kari Owers, managing director of Newcastle-based PR agency OPR, said: “Mr Osborne said “This is a Budget for building a resilient economy. If you’re a maker, a doer or a saver: this Budget is for you.

“This was certainly a Budget for savers, makers and elders which brought some welcome news.

“The rise in personal tax allowances is good to see, especially for younger people battling the cost of living. Good news for savers with the increased ISA limits - I welcome this as it will help us save more for our children’s future.

“Unfortunately it didn’t bring much for small businesses in my opinion – it was really a Budget for big business; makers and exporters. I’d have liked to have seen more help for the service sector, especially SMEs.

“I was keen to see the Chancellor commit to clear and tangible financial support to help SMEs recruit and train young people, so the announcement that he plans to double the number of apprentices to support SMEs is good news. Hopefully this will have a two-fold effect in that businesses can invest in skills for growth and young people get a foot on the ladder to start building their career.

“Finally, as a female business owner, it’s great to see equality measures on the agenda with more women in employment than ever and with income inequality at its lowest for years.”

Chris Wilkinson, head of Business Rates at LSH’s Newcastle office, said: “The Chancellor announced that this is a budget for ‘makers, doers and savers’, but what about commercial property landlords, developers and occupiers?

“George Osborne’s decision to extend the business rate discounts for companies in enterprise zones is a welcome move but it isn’t enough to help the wider commercial property market. Tinkering around the edges will have little impact on the supply constraints that are acting as a drag on economic growth.

“A combination of full empty rate charges and the failure to revalue has unfairly affected those sectors of the economy that most need help. In addition, the 100% charge to owners of empty commercial and industrial buildings has left the most buoyant sectors without high quality, grade A accommodation – inNewcastle city centre, there is currently just under 167,000 sq ft of grade A office space.

“As such, businesses have been forced to make do with poorer second hand stock, which is slowing the economic recovery and pushing up rents.

“As the UK takes steps towards a full financial recovery, the Chancellor should have done more to address underlying issues in the interests of growth. It’s another missed opportunity.”