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How the Budget 2014 could help improve the North East’s Startup Ecosystem score

Recently, we put together the first Jelf Small Business UK Startup Ecosystem Report, and it pains me to report that the North East finished bottom of the pile.

To compile the report, we scored each of the UK’s 12 regions out of 12 for 11 different metrics provided by the Office for National Statistics, with the region with the highest score overall (the South East) being crowned the “safest” place to start a small business in the UK.

As mentioned above, the North East came 12th in the final standings, however don’t fret! It isn’t all bad news for the region. Although it is no surprise that the North East fared badly for the gross household disposable income and value added metrics, it did however place second in the business birth rate metric. This shows that the entrepreneurial spirit is alive and well in the North East, with more and more people deciding to react against the region’s high unemployment rate by going it alone and becoming self-employed.

Thankfully for the North East too, this week’s Budget for once dealt the region a good hand. Manufacturing is one of the area’s biggest industries and employers, and many of the business-friendly initiatives announced by the chancellor George Osborne were introduced primarily to boost the UK’s manufacturing output as a whole.

Therefore, how specifically will the Budget 2014 boost startups and small businesses in the North East?

Exportation

Boosting the UK’s ability to export British goods to the emerging markets of Africa, India and China made up a large part of Osborne’s budget. The UK Export Finance lending scheme - setup to help small businesses take their products further afield - had its budget doubled to £3 billion. This means that manufacturers in the North East will now have access to even more funds to help them export to far-flung markets. As an added bonus, lending rates were also cut by a third, meaning they are now at the lowest level allowed by international agreements, which is another huge boost to the North East’s many exporters.

Energy costs

As any manufacturer will attest, the spiralling energy costs of recent years have been a huge issue for businesses of all sizes. Therefore the news that £6 billion worth of extra support will be provided by the government to help businesses reduce the impact of such rises will be another huge boost to the North East economy as a whole.

The controversial Carbon Price Floor was also frozen on Wednesday by Osborne. This tax on greenhouse gas emissions is intended to incentivise businesses to invest in low-carbon energy generation, but with UK small businesses being charged a higher rate than the rest of the EU, lobby groups such as the CBI called for the Floor to be frozen. Osborne’s decision to do this in the 2014 Budget will give North East businesses a greater change of remaining competitive with EU counterparts.

Hopefully then, the policies mentioned above, as well as other promises to help small businesses gain access to alternative forms of investment, will help the North East to rise up a few places in our next UK Startup Ecosystem Report, due later this year.

This was posted in Bdaily's Members' News section by Dani Booth .