Member Article

The Autumn Statement: North East business reactions

An insight to North East business reactions on various aspects of the Autumn Statement.

Effects on small businesses

Chairman of IoD North East, Graham Robb, said: “I welcome the prospect of changes to business rates and further relief for small business; business rates can be punishingly expensive for smaller businesses and the IoD will constructively engage in consultations to secure long-term reforms. The Chancellor has also increased tax thresholds for personal income tax, including the 40% rate, the IoD would like him to enshrine indexation in law based on the RPI, average earnings or 2.5%, thus introducing a triple lock to prevent fiscal drag from penalising taxpayers in years to come.”

Managing Partner at V&A Vigar & Co (Darlington) LLP, Amanda Vigar, said: “The increase in High Street Rates Discount to £1,500 next year and the extension to the doubling of the Small Business Rate Relief, provide another boost to small business, as do the measures the Chancellor outlined for fuel duty. Such business-friendly measures, alongside such consumer-related announcements as the restructuring of the Stamp Duty system mean this is a positive statement for smaller businesses and those who lead them.”

Director of Odyssey Systems, Christine Gilbert, said: “The Chancellor has delivered an Autumn Statement for small businesses. Key measures, such as the expansion of the discount on High Street Rates and the ongoing reduction of rates for small business and the review of Business Rates, are good news for people who run businesses, which generate growth and create jobs.”

North East R3 Chair, Allan Kelly, said: “It can be frustrating to come across a business that has all the tools to grow but has lacked sustainable funding to support its ambition. This has been a particular issue since 2008. While banks have been lenient with their existing creditors since the financial crisis, new business customers have really struggled to access new bank loans or overdrafts. A significant proportion of UK business owners have to rely on friends and family to plug funding gaps.”

“Government small business finance schemes haven’t always had a perfect track record; hopefully the new schemes will get growing businesses the funding they need to bridge the gap between potential and success.”

Effects on the energy sector, fuel and transport

Chief Executive of NOF Energy, George Rafferty, said: “The Autumn Statement has demonstrated the Chancellor recognises the challenges facing the UK energy sector and its skilled and valuable supply chain. The oil & gas sector and the hundreds of thousands of jobs it supports are vital to our economy and the UK’s energy requirements; therefore a more agile tax regime will encourage investment and the delivery of offshore operations. Once we hear the details of the Chancellor’s plans, I would hope it helps to bring operator plans forward and reinvigorates the pipeline of projects that can be supported by the supply chain.”

“The Chancellor has shown his support for one of the economy’s most integral sectors to help it overcome the effects of falling oil prices and the increasing cost implications of exploration and recovery of difficult to get at resources. NOF Energy is also supporting the supply chain by freezing our membership fees in 2015, as companies increase their efforts to secure a proportion of opportunities.”

Founder of Boro Taxis, Teesside largest taxi firm, Mohammed Bashir, said: “Fuel is the lifeblood of our business and costs such as fuel directly affect customers of taxi firms. While we would have preferred a cut in the disproportionate amount of tax levied on fuel, a freeze is welcome news to our industry, especially as some motoring groups had expected a return of the fuel price escalator.”

Bill MacLeod, PwC’s senior partner in Newcastle said: “Today’s announcement is a strong signal of intent and a clear indication of what might be on the cards for the Northern cities. The investment into tackling the region’s transport system is a major step to enable the region to fulfil its economic potential.

“The North has long been calling for better connectivity between cities outside London. The fact it takes nearly four hours by train to travel between our two freight ports, Liverpool and The Tyne is clearly not good enough and the focus on East to West connectivity is long overdue. We now need to build on this momentum and push harder on the timescales.

“A prosperous North will benefit the whole of the UK and this is an important package of measures for the region, confirming significant investment into science, culture, and infrastructure.”

A Northern Powerhouse?

Mick Thompson, Office Senior Partner for KPMG in Newcastle said: “The Chancellor promised to put the Northern Powerhouse at the heart of the Autumn Statement and was true to his word. His proposals to create a new sovereign wealth fund, the £250m investment in a new advanced materials institute with branches across the North and the promise of more devolution will have captured the attention of local political and business leaders.

“They will now scour the details of these proposals to assess their feasibility and potential impact. The Chancellor’s promise of an open door to devolution for the cities of the North needs careful consideration. It is important that political leaders achieve the right deal for their cities not just a quick one.”

NECC Director of Policy, Ross Smith, said: “It is good to hear the Chancellor once more reiterate his desire to create a Northern Powerhouse. He was clear in his praise for what has happened in Greater Manchester and how the public and private sector are all pulling in the same direction. We echo this and it is time for us to do the same. It is only by businesses, national and local government and the LEPs working together that we can create an environment that stimulates growth across the whole of the North.”

Watson Burton retained counsel, Richard Sowler, said: “It was particularly encouraging to see George Osborne announce that he wanted to do more in driving forward a Northern Powerhouse, part of which will lie with a £640 million investment in the A1 road north and west of Newcastle, as well as a £170 million investment towards the improvement of trans-Pennine roads.”

Effects on technology

CEO of Sage UK, Brendan Flattery, said: “While the already announced £15 billion in road investment is welcome, what was missing from this Autumn Statement was investment in technology infrastructure. Infrastructure investment needs to go beyond the physical realms of road and rail. More high speed broadband and greater 4G mobile coverage across the country will make it easier and quicker for tens of thousands of businesses to grow their businesses and bring in new and more efficient ways of working.”