Member Article

Autumn Statement: Business reaction from across the North West

Following Chancellor Philip Hammond’s Autumn Statement announcement yesterday, we bring you a roundup of business reaction from across the region. From innovation to infrastructure, from tax to transport, we’ve got it covered!

Why not join us with your views by commenting below?

If you missed the budget or want to see the key points, click here for our Autumn Statement summary.

R&D and innovation

Jane Parry, Managing Partner at PM+M

“It is to be hoped that a reasonable amount of the new £23bn National Productivity Investment Fund will find its way to the North West to support innovation by North West businesses and improve connectivity.

Given the advance publicity about R&D and innovation, it was a little surprising not to see any changes to R&D tax credits. However, this is already a very generous relief. The issue is more with the low take up of the scheme, rather than the nature of the tax reliefs on offer. It is to be hoped that some of the new funding might be directed at improving accessibility of R&D reliefs.“

Tax

Mike Stott, Tax partner at chartered accounts DSG

“It’s good to see a strategic focus in the Chancellor’s statement - his measured approach and a demonstrable commitment to retaining economic stability and ensuring the UK is ‘open for business’, will be welcomed by UK business particularly given post-Brexit nervousness.

These positive steps, coupled with the Chancellor’s ‘pro-business’ commitment to a reduced corporate tax rate of 17 percent will help to boost the UK’s competitiveness and drive forward growth by encouraging and enabling innovation and connectivity.

The complexity and volume of tax legislation that businesses have to contend with still presents a real barrier to growth. Although the ship needs to be kept steady - the introduction of measures to simplify this system and create a more business-friendly environment would have been welcome, and another measure which would boost the productivity and efficiency of UK business.“

Jade Chan, Associate at Hill Dickinson

“From a tax perspective, the major headlines we saw from today’s Autumn Statement were targeting parity for taxpayers. Salary sacrifice is to be scaled back (with some exceptions) in what the government has called “disguised tax benefits for employees”. Tax advantages from employee shareholder status schemes, which were only introduced in 2013, will be abolished.

These changes, further details of which are still awaited, will likely have a significant impact for small and medium sized businesses across the region who have structured their employees’ remuneration in this way. Employee shareholder status has, in the past, been used by our clients to reward and incentivise key employees in the business in a tax-efficient way and its abolishment, coupled with an increase in employer national insurance contributions, may not sit well. However, the corporation tax road map remains unchanged and the government has announced that there will be further investment in the Northern Powerhouse and a reduction in business rates which gives an overall picture that is perhaps less bleak than we had expected.“

Infrastructure

Phil Whitehurst, Partner at DTM Legal

“I’m pleased to see a strong focus on driving up the performance of regional cities and I think the North West will be a grateful recipient for the £556m that has been announced to support Local Enterprise Partnerships, as well as its share of the package of £23 billion to support infrastructure and innovation and drive productivity. With the region’s construction, science and tech sectors already booming, further investment will only increase the regions position in the global market.

The Chancellor also vowed to invest £1.8 billion in local infrastructure. I hope to see the investment injected into in the smaller “shovel ready” projects and smaller house building firms that generate a faster return on investment.”

Mark Rathbone, Partner and member of the supply chain and logistics sector at Brabners

“The Chancellor’s commitment to investing in our country’s infrastructure, particularly our road and rail networks, is a positive step forward. Improving the connections between all our towns and cities (rather than the connectivity of our towns and cities to London) would significantly boost our economy – both in the regions and on a national level. It would reduce the amount of time spent moving products and people around, it would improve productivity and it would encourage more businesses to relocate out of the South East.

What’s vital is that the £1.1bn investment in our local transport networks announced today is distributed evenly across the UK. Historically there’s been an inherent imbalance in public infrastructure spending, with the North West receiving around a tenth per head of what London and the South East does, and this cannot continue. When you consider the cost of the Crossrail scheme is £14.8bn, £1.1bn across local transport networks still pales in comparison.

If Mr Hammond is committed to continuing the Northern Powerhouse agenda introduced by his predecessor, as he says he is, he needs to deliver on his promise to rebalance the government’s approach to investment in regional infrastructure. Without it, we run the risk of losing the momentum created over the past 18 months.“

Northern Powerhouse

Mike Perls, North West Chair of the Institute of Directors

“We welcome today’s Autumn Statement which recommits to the Northern Powerhouse initiative and sends a clear signal about the importance of the North as an intrinsic part of the Government’s productivity and industrial strategy. Investment in the region’s connectivity is key, both physically with transport and virtually with technology.

As a key pillar in the delivery of the Northern Powerhouse, it was right to confirm investment into the North’s infrastructure in today’s Statement including the £556M to LEPs in the North. Spending on the railway’s digital infrastructure as well as a programme of major road schemes all signal positive news for the region’s transport networks.

With the Government’s planned investment in technology, in particular the rolling out of ‘full-fibre’ broadband across the UK, businesses in the North West want to see that its digital infrastructure is a priority within this strategy in addition to our inclusion within allocated funding for research, development, science and technology innovation - all areas that are important to the future of the region’s economy.“

Chris Oglesby, Chief Executive of Bruntwood and Chairman of Manchester Science Partnerships

“We’re pleased to see the Chancellor reinforcing the importance of the Northern Powerhouse and Midlands Engine. The economic thesis that underpins these concepts is undeniable.

We welcome the £25bn fund focussed on innovation and infrastructure. Brexit negotiations aside, it our opinion that the other two ways in which the Government can best support the economy are investment in excellence in the science and technology sectors and in major infrastructure investment; particularly transport.

We are also pleased to see the recognition of the value of further devolution; something that we see as critical in rebalancing the country’s economy.

We look forward to further announcements in due course and to working with Government to ensure that our Northern Powerhouse science strategy contributes fully to the country’s industrial strategy.“

Mark Hurley, Director at professional services and engineering firm, WSP | Parsons Brinckerhoff in Manchester

“It was good to see the Chancellor promise major infrastructure investment – earmarking £1.1bn for the regions – as this will be key going forward in terms of developing the quality of our Northern cities making them desirable places to live and work, as well as attracting investment and talent to ensure competitiveness.

The focus on highway improvements and on creating a world-class digital rail system will be key to addressing our capacity problem here in the North, and is a more forward-thinking approach than simply focusing on high speed rail as in the past. Addressing capacity issues is vital for achieving greater inter-city connectivity which must be tackled if we’re to create a Northern Powerhouse.

The £2.3bn Housing Infrastructure Fund is also a positive step in addressing the housing deficit in our region, but the Government will need to be clear in ensuring private and public sectors understand how to access this funding by creating clear commercial funding models for social infrastructure projects.“

Digital

Dean Ward, Technical Director and co-owner at Evoke Creative

“The one thing all businesses across the North West were hoping for was a robust commitment to, and detailed breakdown of, road and rail improvements across the region – so it’s disappointing the Chancellor was light on detail in this area. But the £1 billion pledged to digital infrastructure is an important announcement for tech-based businesses across the UK.

The Internet of Things (IoT) is set to revolutionise delivery of public services, while also offering a raft of commercial opportunities for innovative technology companies.

Rolling out full-fibre broadband, and supporting trials of 5G mobile networks, are commendable steps to support connectivity in our cities and facilitate the ongoing development of the IoT.“

Professor Karl Dayson, Associate Dean and expert in banking and finance, University of Salford Business School

“With the news that an additional £30b of debt has been added to the balance books, the first bill has just come in from Brexit.

The government has decided that the only thing they can do to counter the economic impact of Brexit is to redouble their efforts to support digital technology companies, and while this £400m investment is welcome news for the wider UK economy, it will do nothing to deliver industrial jobs to the north of England.

The overwhelming majority of these firms are based in London and the South East, and if the Northern Powerhouse rhetoric meant anything there will need to be real commitment to make sure that the north gets a fair distribution of this money.“

Housing

Michael Foxford, Partner at Birchall Blackburn Law

“There is no doubt about it, at the moment, there aren’t enough houses being built, which impacts those who want to make their first step onto the ladder – and doing that at current prices is a difficult step to make – so the news of building more housing and affordable housing can only be seen as good news.

Of course, time will tell how much of a difference this will make to the market - 140,000 new houses are not going to appear overnight, but it certainly feels like a step in the right direction and I’d be keen to see what else the government can do to help the market. More still needs to be done.

The Chancellor spoke about helping those who are only just managing. This will be a welcome relief to people saving hard to realise their dream of owning their own home.“

Productivity

Terry Weston, Engineering College CEO

“The chancellor has rightly identified the UK’s need to become more productive, so that wages can rise and people can enjoy higher living standards.

The announcement of a new National Productivity Investment Fund of £23bn to be spent on innovation and infrastructure over the next five years is welcome. However, this must filter through to the North West region which needs greater recognition for its world leading engineering firms.

We are calling for greater investment in skills development as businesses will be placed under larger pressure to attract and retain the best engineers from a shrinking pool of talent.“

Property

Rebecca Durrant, Tax partner at Crowe Clark Whitehill

“More bad news for landlords as it is likely that letting fees will no longer be billed directly to the tenant.

Whether landlords will transfer this cost to the tenants remains to be seen, however this may have to be the case to enable some landlords to meet their costs.

The Chancellor did commit to the promised £12,500 tax free allowance for individuals by the end of this parliament which should see working families keep more of their earnings, going some way to help those that are ‘just about managing’.

However in reality is this likely to cover the rising costs of food etc in the current economy?“

Bill Chandler, Legal Director at Hill Dickinson

“People power appears to have ensured that the Land Registry will remain in the public sector, for the time being at least. Having been the subject of two separate privatisation consultations in as many years, it seemed that privatisation in some shape or form was inevitable.

The spectre of privatisation raised inevitable concerns over the impartial exercise of the Land Registry’s quasi-judicial functions and the integrity of the national register it maintains, which currently extends to 24 million titles worth over £4 trillion.

A massive backlash from the legal profession, the property sector and the public at large, supported by politicians of all persuasions, appears to achieved an unlikely volte-face.“