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Spring Budget 2017: What the North East business community wants from the Chancellor

With Chancellor of the Exchequer Philip Hammond delivering the Spring Budget on wednesday this week, Bdaily North East takes a comprehensive look at what the region’s business community is saying ahead of the announcement.

From wishlists over tax and business rates, to concerns surrounding innovation and Industrial Strategy, we bring you the region’s most in-depth preview of business opinion.

Late Payments

Dr Yvonne Gale, chief executive, NEL Fund Managers

“Given our close relationships with dozens of North East businesses that rely heavily on maintaining a steady and dependable cash flow to enable their continuing growth and development, our Spring Budget wish would be for a firmer line to be taken with large companies who don’t pay their smaller suppliers on time.

It’s unacceptable that, according to the government’s own figures, £26.3billion is currently owed in late payments, and while its recent announcement that new ‘duty to report’ regulations will soon force larger businesses to report on their payment practices twice a year are welcome, this is a situation that should have been addressed many years ago.

SMEs are the life blood of the economy, yet they are often plagued by customers taking a sloppy or even exploitative approach to payment terms, and finding their cash flow is not meeting legitimate expectations can be a key reason behind growing firms not being able to make the progress that they should be doing, or even not being able to stay in business at all.

It is high time the Chancellor supported the SME business base with hard measures to counter these practices.“

Business rates

Craig Cumpson, North East Head of Tax at EY

“The ongoing furore surrounding the impact of the forthcoming rates revaluation has focused on the shifting of the current burden of business rates from some locales to others. However, beyond a shift from one taxpayer to another, the revaluation locks in the significant increase in the burden that has been slowly introduced over time.

Much like boiling a frog, the gradual increase in business rates each year above the rise in property values has led to the burden in aggregate that started at 41.4% of rateable value in 2010 rising to an expected 48% in the latest revaluation.

In no other tax is the rate increased merely because the government wants to get the same amount of tax. VAT rates, for example, don’t go up merely because spending falls. If the Chancellor feels the need to respond to the pressure on business rates, resetting business rates back to 41.4% would seem a good place to start.

The opportunity for a more fundamental change to a different method of allocating the burden has been sadly missed in the last few years of consultation.“

Donna Bulmer, Managing Partner, Haines Watts North East

“The government really needs to demonstrate that it is backing the growth ambitions of small businesses in the Spring Budget. Much criticism has already been aimed at the changes coming to business rates and its growing burden on businesses that want to scale-up.

The North East economy is driven by small business and, as the first proper budget since the EU referendum, the Chancellor must make evident his plans to support smaller and more at risk businesses through uncertain times. Indeed, supporting such small entrepreneurial businesses will be vital to boost jobs and long-term growth both here in the North East and nationally.

Moreover, while the Making Tax Digital (MTD) initiative is a welcome change to the way taxpayers file returns, the government must consider the circumstances of millions of small and micro businesses – many of which don’t keep records electronically. Therefore the deferred starting date and turnover threshold will be two much anticipated announcements. Allowing the initiative to be tested while also giving small businesses time to adapt to the coming changes will be paramount to the success of MTD.“

Stephen Sumner, MD at Explore Wealth Management

“As we begin our negotiations to leave the European Union, it’s difficult to predict what we will see in this years’ Spring Budget.

I would however like to see Philip Hammond build on last year’s Autumn Statement and do more to stimulate the economy once we begin the formal process of leaving the European Union. He could start with another significant reduction in corporation tax so that overseas companies would have an extra incentive to invest in the UK or to remain trading in the UK. Existing British companies would also benefit from such a change, as this would enable them to keep more of their hard-earned profit.

In addition to this, I would also wish to see a reduction in business rates for start-up companies and greater monetary incentives for those companies who are setting up in areas of high unemployment as a means of potentially creating new job opportunities.“

Brian Manning, chief executive at Esh Group

“The question of business rates and this year’s revaluation is on everyone’s lips at the moment. The proposed changes won’t affect Esh Group directly, but it has the potential to impact the market. It might change the dynamic on the High Street and therefore have a knock-on impact on the viability of other developments.

Offering tax relief and other support to SMEs would benefit our supply chain. It would be good to see the Chancellor offer something here. On the intention to increase the personal tax allowance can only be good news for Esh Group staff, so we’ll welcome that move.“

Peter Lambert, landlord at Fenham Hall Studios

“As it stands, our tenants along with thousands of other businesses across the North East are set to be among the 75 per cent that will benefit from Business Rates revaluations which are due to come into place on April 1st.

But there could be more good news for small businesses in the North East from Wednesday’s budget. Communities secretary Sajid Javid has revealed that we can expect changes to be announced in the budget which will offer further help for small businesses.

“This is potentially exciting news for the North East, because not only are many businesses in the North already set to benefit from the rating revaluation, but also the increase in the RV threshold from 1st April from £6,000 to £12,000, which is unlikely to change, will have an immediate benefit for small businesses, many of whom will pay no rates at all.”


Anne Elliott, Chief Executive of Darlington-based Latimer Hinks Solicitors

“The Spring Budget is an opportunity for this government to simplify taxation. The sheer volume and complexity of tax law stifles the property market and business, and, as far as I can see the Office of Tax Simplification is simply not doing its job.

“In the past we have had too many fiscal events with too many announcements that have made it too difficult for business and private individuals to make long-term financial plans. A commitment to simplifying taxation would show the Government is pro-family, pro-investment and pro-business, giving everyone some certainty in uncertain times as we enter the post-Brexit era.”

Sean Bullick, CEO of Newcastle NE1 Ltd, the city’s Business Improvement District

“The first thing I would like to see the budget address is support for businesses whose rates have risen unexpectedly, this issue is not solely confined to the south. While this change will generally benefit businesses in the north there are exceptions, which we have already made representations to the Department of Communities and Local Government about.”

“We would also like to see confirmation that Corporation Tax for small businesses will be reduced to 17% by 2020, as promised in previous announcements.”

Dave Robson, Regional Managing Director at Newcastle-based Henderson Insurance Brokers

“The continued rise of Insurance Premium Tax (IPT) has the potential to cause headaches for families and businesses throughout the UK, so I would call on the Government to freeze this or cut it, going back on the planned increase announced in the Autumn Statement. Further increases will only drive up costs for people with multiple insurance cover options.

There needs to be an urgent review into the way that insurance pay outs will be calculated, as this also has the potential to impact on people’s pockets, particularly younger and older drivers, not to mention business owners. Government needs to re-consider this change as it is set to negatively impact the entire insurance industry and add further unwanted costs, including employers’ liability insurance.“

The North East on the world stage

Mike Matthews, managing director of car parts manufacturer Nifco UK

“This budget is important for the North East. We are a region which has benefitted from Government investment in the past but to achieve our aims and ambitions, as set out in the 2017 Manifesto of the North East England Chamber of Commerce, we need the Government to recognise the North East and to work with us.

The aim is to become a global, connected, competitive, influential and working North East. To do this, we need a seat on the top table so we can be heard, we need trade missions so we can build our exports, we need to be able to secure funding so that we can compete, we need investment in our transport links and underpinning all that, we need support for the development of skills to ensure the ongoing growth of our region is sustainable.“


Alastair Wilson, tax partner at Tait Walker

“A key priority for the Spring Budget is to provide businesses with clarity on the process for Brexit so that it encourages, rather than discourages, investment. This much-needed clarification would help to strengthen confidence amongst businesses across the UK.

As we prepare for Brexit, tax relief for manufacturing infrastructure and factories, akin to the Industrial Buildings Allowances would allow the manufacturing industry to continue investing to ensure it is able to compete on a global scale.

Additional tax reliefs for energy efficient buildings and plants, as well as simplification of the enhanced Capital Allowances process would encourage more businesses to invest at a time when concerns around a loss of funding is high.

Following the Spring Budget announcement, the North East Combined Authority and Tees Valley Unlimited must continue to work as one single “unified voice” to champion the region as a whole, whilst working to safeguard the best interests of the North East.”

Chris Stappard, managing director at Edward Reed Recruitment

“Politics is impossible to predict these days but in my opinion, the Spring Budget needs to set a stronger foundation for rebuilding and most importantly, stabilising the UK’s business economy.

The new Chancellor’s decision in late 2016 to abolish the Autumn Statement and revert to an annual budget announcement suggests to me that unlike his predecessor, Philip Hammond is happy to relinquish some of the limelight in order to allow businesses more time to adopt and adapt to the changes the government does make, on an annual basis.

In order to allow the government to focus on Brexit and give businesses some much-needed certainty in these uncertain times, I’d like to see some commitment from Philip Hammond to simplify the tax system and review the business rates paid by start-ups and SMEs.

I think that these relatively small changes could go a long way towards incentivising existing UK businesses to remain in the UK and encouraging overseas companies to potentially expand into the British markets post-Brexit.“

Rob Charlton, CEO of architecture and technology business Space Group

“It is difficult to solve the uncertainty issue around Brexit. Article 50 could help but business will still be very careful around any investment, which will slow growth. To counteract this in the upcoming Budget announcement, the government could increase infrastructure spending.

The government’s housing white paper was full of the usual ideas without a bold and clear plan. It would be good to see some real incentive to deliver more social housing as I see this as a significant issue that needs addressing.“

Kevin Byrne, Managing Director of Seymour Engineering

“The focus of the nation will clearly be on what is in fact Phillip Hammond’s first budget. Whatever your politics or views on Brexit, we need this budget to provide a platform for sustainable growth. The nation will have to be more efficient in everything we do in order that inevitable trade tariffs are less burdensome. We manufacture quality desirable products, but they will only be bought if they are competitive.

“This budget needs to stimulate investment confidence, where existing businesses re-skill, re-tool and future proof against the anticipated backlash from our erstwhile trade partners. We need commitment to new business start-ups. We need clarity on the Apprenticeship levy, let’s not just accept populist rhetoric.

There needs to be incentives to bring back the manufacturing supply chain, which necessarily brings job creation, tax revenue and less pressure on the welfare system that can then be redirected to more pressing issues in the NHS.“


John Harrington, CEO of Hartlepool-based furniture manufacturer Top Brass

“Top Brass is committed to providing great employment and skills training to its people, and anything the Chancellor can do to support firms like ours who’ve made a big investment in people and plant, and who want to grow and bring high quality jobs to areas which have suffered in the past from job losses, would be most welcome.”

Darren Hankey, Principal of Hartlepool College of Further Education

“It’s pleasing to see Further Education (FE) feature in government policy over the last few months in terms of the nation’s industrial strategy and the role FE can play to ensure the nation has the necessary technical skills.

A key recent message has clearly highlighted the importance of a skilled workforce being the backbone of the nation’s economic successes and future ambitions. The Spring Budget affords the government a wonderful opportunity to back up some of these nice words regarding the FE sector with some long-overdue investment.

“For FE specifically, this commitment would help close the funding gaps between our sector and those of secondary and higher education as well as support the government’s ambitions to enhance professional and technical education.”

Zoe Lewis, Middlesbrough College ollege principal and chief executive

“Successful infrastructure projects are of huge benefit – but it requires highly-skilled workers to carry them out.

“As one of the biggest workforce trainers in the North East, we applaud the new emphasis that is already being placed on creating apprenticeships and would urge the Chancellor to continue investing in training and further education.

“The UK still has a huge skills shortage, and the future prosperity of the nation depends on bridging that gap.”

Industrial Strategy and Northern Powerhouse

Richard Hogg, Managing Director of Jackson Hogg Recruitment

“This budget is an opportunity for the UK to start building the workforce of the future, by supporting not only university and college students, but people already in work and their employers to develop high-tech, high-value skills.

The engineering, manufacturing and energy sectors are looking for an indication of how the Industrial Strategy will empower the Government and businesses to work together to make Britain’s post-Brexit trade offering both competitive and future-proof.“

Catriona Lingwood, Chief Executive of Constructing Excellence in the North East

“Investment needs to be put exactly where it’s needed and for me, transport and energy are obvious choices given their role in boosting national productivity, which will help the government hit their target. There’s also an evident need for investment in housing given the pressure and skills shortage the industry is currently facing.

It will be good to see a focus on the North and the Northern Powerhouse but it’s likely that there’ll only be a mention of the new Industrial Strategy, which ministers have already said will help the economy in every region. Here’s hoping this Budget gives us more specifics than that.“

Robotics and AI

Brian Palmer, CEO of robotics design and manufacturing experts Tharsus

“I was pleased to see the Government announce funding for robotics and artificial intelligence (AI) research as part of its Digital Strategy and hope the Chancellor builds on this in his Budget statement.

The £17.3 million promised may sound significant but in reality, it is only a tiny fraction of what is needed to keep the UK at the forefront of the robotics and AI industry. The jobs of the future and the country’s prosperity in coming years depend on our ability to compete internationally in growth industries like robotics. Investment in research & development is not just important to robotics and AI as sectors in their own right, it underpins productivity growth in many others“

Digital and tech

Lisa Eaton, Director of Newcastle-based digital and brand agency, Unwritten Creative

“The digital sector is one of the real success stories of the North East and I’d encourage the Chancellor to use his Spring Budget to help strengthen the region’s position as a hub for this truly 21st century industry.

Incentives to encourage graduates coming out of our excellent universities to stay in the region, coupled with more support for small and dynamic North East firms to recruit these talented people will keep the region at the forefront of the sector.“

Richard Lane, co-founder of durhamlane

“The tech sector is booming in the region and Newcastle continues to be recognised as a global hub, so we need to build on this positivity and stimulate further economic growth in the region, as well as encourage job creation in these sectors.

Companies need the confidence to invest in their people and services to keep jobs in the North East, supporting our thriving digital economy.“


George Rafferty, Chief Executive of NOF Energy

“The UK’s place in the global economy has come under the microscope since the EU Referendum and the Budget presents a real opportunity to support exporters. The subsequent fall in the value of the pound after the vote gave UK companies a welcome international trade boost highlighting the attraction of quality British products, skills and services.

The Chancellor can maintain that momentum with measures that can further support exporters, including those from the energy sector supply chain that have the technology and capabilities to serve global markets.“

John Kearney, Finance Director of the Wynyard-based Nortech Group

“The North East is in an excellent position to serve the energy sector, not only in terms of its integrated and experienced supply chain, but also because it’s ideal geographic location. Therefore, ensuring the region has reliable and well-maintained infrastructure will enable the region to maximise on those advantages.

The Chancellor can show his commitment to the Northern Powerhouse and the companies operating out of the region by making sure improving the region’s infrastructure is a core part of delivering on our economic potential.“

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