Partner Article

General Election 2017: A roundup of North East business aspirations

Six weeks have passed since Prime Minister Theresa May announced a snap election, meaning voters will tomorrow turn out in their millions to elect a new government.

Whilst the manifestos of the two main parties couldn’t be much further apart, the country is united in uncertainty ahead of Brexit negotiation and future economic challenges.

We’ve collated a comprehensive roundup of business opinion and aspiration, from multiple sector experts across the North East, giving you an insight into the hopes and needs of regional industry.

As ever, we encourage you to comment below and get involved in the debate. Until then, sit back, relax and scroll down to read what North East business leaders have to say.

Brexit and exports

Iain Forrest of Forrest Digital, a digital marketing company based in Stockton.

“As Brexit is now inevitable, we need whichever party comes to power to ensure the North East gets the best deal possible.

Many of my customers export to the European Union and they are concerned that Brexit will have a negative impact on their sales and restrict their access to foreign markets.

Export values fell in the North East last year and if the uncertainty over Brexit continues, there is a real chance that local businesses could continue to lose out.“

Paul Goldfinch, Founder of Polar Krush

“In the run up to the election I think Brexit is still at the front of everyone’s mind. As a business, we export our products across the world and I have ambitious growth plans for Polar Krush over the coming months and years.

Whatever the outcome of the general election, we will be leaving the European Union and I support Theresa May and the current government to offer some stability during this process and to broker the best deal possible for UK trade.“

Tax

Alastair Wilson, tax partner at Tait Walker, reviews the manifestos of the main parties.

“For once in the run up to a General Election there are very clear differences between the tax and economic policies of the two major parties. The Conservatives policy is much of the same with cuts to business tax and red tape while Labour’s focus is on increasing business tax to fund other purposes.

“The Conservative Party is pledging to keep business tax low in a bid to encourage inward investment, while arguably Labour’s proposal of increasing corporation tax, to as high as 26 percent as Labour proposes, could deter inward investment which is a vital part of the North East economy.

“As a tax adviser I would question the likelihood of tax increases raising as much additional tax revenue as Labour has suggested. History has shown repeatedly that where increased taxes are proposed the self-employed or business owners do what they can to mitigate the impact of tax rises and the forecast tax “take” is typically overstated in forecasts.

“Both parties’ commitment to the Northern Powerhouse infrastructure is positive news for the region, and in particular their pledges relating to the rail infrastructure which should enable us to travel more effectively across the north.

“The real question for the winner is how they deal with the Brexit negotiations which will commence shortly after the election and, in both cases, neither party has provided clarity.”

Education and Skills

Steve Grant, Managing Director of TTE Technical Training Group

“First and foremost I want to see the next Government support the economy of Tees Valley and opportunities for our young people. In addition to this, the export of UK skills and training should be a significant part of the Government’s post-Brexit global export agenda.

Support for young people in apprenticeships, such as subsidised travel to work and their places of education would be a very welcome step, in terms of ensuring access to opportunities regardless of someone’s financial background.“

Small businesses

David Cliff, Managing Director of Gedanken

“The new government needs to really ‘get’ small businesses, and make an effort to support them and allow them to flourish. In recent history, we have seen far too much emphasis on the government’s relationship with big business and it’s capacity to employ swathes of people, rather than the impact that can be made by a company with fewer employees.

People with real passion and dedication to their chosen sector often set up these businesses, and more focus must be given to the role these talented individuals contribute to the UK as a whole.

Effort must also be made to counterbalance infrastructure investments in the North East, as at present, this seems to stay disproportionately south and north of our borders. Cities such as London and Glasgow, appear to get the funding they need to evolve and develop into desirable commercial hotspots, that will be invaluable to attracting business once Brexit negotiations are complete.

The North East needs to be attractive to businesses, consumers and investors alike, and the government holds the key to that door.“

North East entrepreneur Jeremy Middleton

“Businesses create jobs, especially small businesses growing to become medium and large-sized companies. In fact, almost all of the net growth in employment can be attributed to companies scaling up, and what the North East needs is policy that supports just that.

Money for business investment, schools and skills and the infrastructure for people to get to work all play a part in growing the businesses that create jobs. On top of this there are other barriers that affect all businesses, such as the burdens of legislation, regulation and taxation.“

Energy

George Rafferty, Chief Executive of NOF Energy

“There are increasingly positive opportunities across the energy sector, including improving conditions in the North Sea and the steadying of the oil price, together with an active offshore wind market and developments in the new nuclear industry. Therefore, whatever party wins the election, they all have to make a commitment to supporting and not hindering the positive direction the industry is currently taking.

I’d also like to see a greater commitment to ensuring greater local content on UK based projects. Whatever your views on Brexit, leaving the EU presents the best opportunity Britain has had for some time to help high quality UK suppliers gain a greater share of the market.

This includes decommissioning, which will be a significant part of the offshore industry for the next few decades and can benefit from the already well-established UK supply chain, including several companies based in the North East.“

Phil Pallister, Managing Director of 0800 Repair Gas

“The introduction and continued investment in energy efficiency and saving schemes must be factored into the next Government’s agenda.

They have the potential to benefit and pass savings on to the wider population, as well as contribute towards hitting the country’s ECO targets, and must be made more accessible to people, together with additional support for companies and installers that provide these services.

We are committed to investing in our infrastructure and people, so for us to be able to continue this, the Government needs to also back business and, in particular, the small business community.“

Infrastructure

Rachel Turnbull, Chief Executive Officer of TT2

“It is vital that the government continues its support for the budget and development of infrastructure improvements. The North East is an incredible place with a huge amount of potential, however in order for it to successfully grow, we need to have the infrastructure in place to support it.

Ventures like the Tyne Tunnel, and the many commuter routes that link us to the bigger cities, cannot be maintained without significant investment, and are essential to the continued success of the region.“

Chris McDonald, CEO of the Materials Processing Institute

“The next Government must remain committed to the Industrial Strategy and its pillars for growth that were introduced at the start of the year. It demonstrated a commitment from both Government and industry to work together, which will support inward investment, job creation and growth, and tackle the productivity gap that has long been a lingering issue for the UK economy.

In the coming Parliament, the need for our industrial manufacturers to respond to the challenges of automation and the 4th industrial revolution will be paramount. Institutes like us are already coming up with solutions to help companies deal with this, but more support is required, through Industrial Strategy, to keep UK businesses at the forefront of this automation revolution.

Industry requires additional support through initiatives to capitalise on our world leading science and innovation capabilities, to help boost R&D and product development.“

Penny Marshall, ICE Regional Director for the North East

“We know that investment in infrastructure can help boost economic growth across the UK by creating jobs, improving connectivity, regenerating areas and communities. The transport, energy and housing that we all depend on would simply not function without it.

Whoever governs our country after the General Election must place infrastructure investment at the heart of their plans to help stabilise and rebalance our economy. The construction industry contributes a great deal to the regional economy and the country as a whole, so we need to see an ongoing commitment to the industry after the election.

To deliver the infrastructure we need, the industry requires 87,000 new starters each year to join the 2.6 million already working in construction across the UK, so I would like to see a greater emphasis and focus on the STEM agenda within education. This will help to inspire youngsters into STEM-related careers and help plug the skills gap.“

Property

Robyn Peat, Managing Partner at land, property and business consultancy George F. White

“One of the key points across both manifestos that stands out to me, given the sector we work in and the clients we work for, is the land tax that Labour is proposing. If Corbyn wins the election, he plans to look at proposals for a Land Value Tax (LVT) as a possible replacement for council tax and business rates.

Land value taxes will be paid by landowners on the rental value of their land. In other words, homeowners will face a charge based on land value rather than house prices. This so-called garden tax will see an average home being charged £3,837 - more than three times the £1,185 council tax bill they currently pay.

Add to this the changes in inheritance tax and the risk of rising interest rates, homeowners are likely to face huge tax increases under a Corbyn led government. The average mortgage would rise by £1,386 a year and, if you combine that with the land value tax, this would lead to an average annual bill of £5,000.

Labour will also reduce the inheritance tax threshold from £850,000 to only £650,000 - a move which would decrease the amount middle class grandparents and parents can pass on to their children.“

Sean Bullick, Chief Executive of Newcastle NE1, the city’s Business Improvement District (BID)

“The next Government, whatever its political make-up, needs to adopt policies that will unlock the economic and job creation potential of businesses in Newcastle and the wider North East.

Before the election was called there was legislation waiting to be passed which would have allowed cities and towns to create Property Owner Business Improvement Districts, which are currently only allowed in London and Scotland.

Property Owner BIDs enable property owners to collectively invest in their areas, and have been hugely successful in terms of improving town centres and creating growth, in part by bringing the long term perspective of property owners into consideration.

The new Government and politicians at all levels should consider the success and flexibility of the BID model and how it can be best utilised to catalyse investment and drive economic growth. BIDs are run as not for profit businesses, by business people, therefore achieving significant results with small teams and few resources, delivering the best possible return on investment for the areas they represent.“

Scaleup

Nigel Mills, Chairman of the Entrepreneurs’ Forum

“In a year of political shocks one infinitely sensible development gained little attention but was a hugely important to businesses looking to grow.

The appointment of Margot James, the Small Business Minister, as the Government’s ‘Scale-up Champion’ and inclusion of support for scale-up businesses in its Industrial Strategy consultation signalled that Government was finally starting to understand the economic and societal benefits of backing growth in existing enterprises.

In recent years the UK has been good at creating start-up companies but not scale-ups, so I would like to see the next Government continue the role of Scale-up Champion.

In its Industrial Strategy Green Paper the Government identified its role in overcoming the scale-up gap, that being the issues preventing companies from growing, as providing investment funds and support for building networks that link businesses to sources of funding.

Two funding areas particularly important to growing businesses are funding and credit guarantees for exporters, and the continuations of the EIS and SEIS investment schemes.“

And what of the campaigning itself?

Christopher Dobson, senior partner, Dobson Marketing

“The lead up to this election is pretty close to being an unpleasant shambles with the most recent puzzling event being the prime minister ducking on a televised debate. So she cannot hold her own on this sort of platform what hopes have we when she plans to take-on Europe?

I am sure she sleeps well at night knowing she has the support of Boris Johnson who’s ‘put the money into the NHS rather than Brussels’ campaign was largely influential on the Brexit outcome.

How can people indicate their displeasure? By tactical voting. My constituency, Berwick-upon-Tweed is Tory but used to Liberal under the steady hands of Lord Alan Beith. Bring back the Liberals, hold the Tories to account. Here’s hoping.“

Kevin Byrne, MD of Seymour Civil Engineering

“I no longer believe that there will be a landslide victory for the Conservative Party and Mrs May’s tactics could backfire as Labour erode her lead.

However, I firmly believe that we need a party with a substantial majority in order to deliver a Brexit settlement and indeed post Brexit stability throughout the next 5 year government term.

A narrow majority or indeed a hung parliament will not have the teeth to deal with the European Union machine which will make life post Brexit more difficult than it could be.

We also need a party that can tackle globalised terrorism with a determined resolve that proves effective and is capable of gaining cross party support. Now is not the time for political snipping, clear policy that is workable and accepted by the majority has to win through.“

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