Autumn Budget 2017: Reaction from across the North East business community
Going into today’s Budget, many speculators thought this may be Philip Hammond’s last.
Seeking to pacify and even excite the nation, the embattled Chancellor faced the almost impossible task of reassuring British voters that Theresa May’s weakened Conservative government could deliver.
In a Budget packed with gags and quips, including all things from cough sweets to I’m a Celebrity and Jeremy Clarkson, some serious announcements regarding the North East emerged from underneath the usual raucous in the House.
Statements and budgets gone by have often been criticised, rightly I may add, following little mention of the region. This Budget, however, addressed many concerns held by the North East business community, which have indeed manifested in recent times.
Sentiment in the region right now can probably be summed up as the best Budget the North East could have realistically hoped for.
Pledging £337m for new trains to bolster the Tyne and Wear Metro system, the Chancellor addressed eternal cries from the region to improve transport infrastructure. Regardless of whether this is enough of a win for the region, it remains a win nonetheless.
Mr Hammond also announced the agreement of a ‘North of the Tyne’ devolution deal between Newcastle, North Tyneside and Northumberland. While devolution continues to divide the North East, the announcement promises the region access to a £1bn fund it’d otherwise miss out on.
Moreover, there was investment news for the Tees Valley too. Don’t miss our coverage of what the Budget means for the Tees Valley region by clicking here.
Following the announcement, we’ve gathered a comprehensive collection of business opinion from across the region, hailing from a multitude of sectors. So sit back, relax and take in what the North East makes of it all.
Andrew Hodgson, Chair of the North East Local Enterprise Partnership (LEP)
“We welcome the £337m investment in the Tyne and Wear Metro system. I personally wrote to the Chancellor ahead of the Budget to call for this funding.
The strategic importance of the Tyne and Wear Metro to the local economy of the North East of England cannot be over-stated. It carries up to 40 million passengers each year, two thirds of whom are travelling for work or education and is a significant employer in its own right.
The Transforming Cities Fund, which will invest £1.7bn into transport infrastructure and the commitments to develop the next generation of 5G technologies, were also positive. The North East can play a key role in testing and delivering 5G for the UK.“
Jonathan Walker, Head of policy and campaigns, North East England Chamber of Commerce
“Our campaigning ahead of this Budget has been successful on a number of important issues for the North East. We wanted new Metro trains as a matter of priority and are delighted these are now on their way.
As part of our desire to see a more influential North East we had asked for more funding and powers for Tees Valley and completion of a North of Tyne devolution deal. It is great news that the Chancellor has listened on both of these issues.
Ahead of the Budget we called on the Government to get serious about the need to change the distribution of investment and economic activity in the UK.
The announcements today are a big step forward but we await the long term shift in Government thinking which will hopefully come forward in the publication of the Industrial Strategy.“
Richard Turner, Head of Investment at Cushman & Wakefield’s Newcastle office
“The North East featured unduly prominently in this year’s budget with confirmation of a North of Tyne City deal bringing £600m of investment in the region albeit over the next 30 years.
The conclusion of the long running saga of funding for the replacement of the Metro rolling stock with confirmation of a £337m commitment was also welcome in securing a key piece of North East infrastructure.“
Simon Hanson, North East Development Manager, FSB
“Devolving greater powers to the people of the North East is fundamental to business, government and wider society driving forward our economic growth.
The North of Tyne deal offers a real opportunity to rekindle the pioneering flame here in the north east to improve our skills base, our local infrastructure and create new jobs throughout the region.
This will only be achieved by a unique partnership between the Government, local authorities and business, and so it falls on all of us to make a success of the new deal.“
Sean Bullick, Chief Executive of Newcastle NE1 Limited
“This is hugely positive news for Newcastle and the wider city region. Whilst the additional money to invest in the region’s economy is welcome, it is perhaps the ability to make local decisions on local issues such as skills and training that will deliver the greatest dividend in longer term.
Also, devolution means having a seat at the national table and a direct link into Whitehall. As we have seen in regions that have already secured devolution, the initial deal is the start of the process and I fully expect that when established, the newly formed combined authority will continue to make the case for greater investment and more devolved powers.
Businesses in Newcastle will be happy that the region will now have a stronger voice in regional affairs and national policy, with transport infrastructure and investment being a high priority. There is a growing sense of ambition and confidence in the region, there are big plans for the future, and this is just the beginning.
The three authorities have done a sterling job securing this deal, and deserve our congratulations.“
Chris Hearld, KPMG’s North region chair
“Investment in infrastructure has long been the foundation upon which the growth of our regional cities, and improvements in our productivity, will be built.
That half of the new Transforming Cities Fund is to be shared amongst those cities with metro mayors is good news for the two thirds of the Northern Powerhouse that has secured devolution deals.
Indeed, it’s particularly pleasing to see the massive strides that are taking place in the North East which will be no doubt buoyed by pledges of investment in the Tyne & Wear Metro and the Redcar steelworks.
However, once again the people of Yorkshire are left counting the cost of their region not being able to get its devolution act together. Being left to compete for its share of investment against the rest of the UK must surely increase the risk of it becoming a straggler in the race for economic growth.“
Dr Yvonne Gale, Chief Executive, NEL Fund Managers
“The Chancellor’s announcement of the £1.7bn Transforming Cities Fund could be very good news for North East businesses that are looking to expand through recruiting and retaining skilled staff, and we would urge local authorities across the region to work together towards accessing as large a share of it as they can.
The planned investment in better broadband infrastructure will be welcomed by businesses across the North East, especially those in the more remote parts of the region, while the increase in the research and development tax credit allowance and the extra funding that goes with it will provide a greater imperative for companies to invest in enhancing the range of products and services they provide.“
Jonathan Scott, Tax Partner at Haines Watts
“The Chancellor’s pledge to research and development is a vote of confidence for UK innovation. Though we are still a long way off many other countries in terms of our investment in R&D, the commitment of £2.3bn in R&D and raising of the RDEC relief rate from 11% to 12% are very encouraging for innovative businesses.
Working with business all over the UK, we are seeing the positive effects R&D relief is having on businesses and their ability to progress and further invest in innovation. We hope to see long-term government support for R&D to further galvanise private sector investment and increase economic growth.“
Tech and creative
Rachel Peacock, Digital Union’s Network Manager
“Overall, There are some positive takeaways in the recent budget in terms of the North East businesses and creative digital sector.
However, with the formation of the new Tech Nation, it’s more important than ever that organisations such as ourselves (Digital Union and Generator) continue to work with businesses to ensure we capitalise on regional opportunities.
Further collaboration between organisations to continue campaigning for increased funding for the digital and tech sector within the North East as a whole, will also be a priority.
We would have liked, however, to have seen more funding for tech start ups, so programs and events such as our free Start Up Advice Day will be more crucial than ever.“
Dave Gibson, Blu Sky Co-Founder
“£21m will be invested over the next 4 years to expand Tech City UK’s reach – to become ‘Tech Nation’ – and support regional tech companies and start-ups.
Tech Nation will roll out a dedicated sector programme for leading UK tech specialisms, including AI and FinTech. Regional hubs will be located in: Cambridge, Bristol and Bath, Manchester, Newcastle, Leeds and Sheffield, Reading, Birmingham, Edinburgh and Glasgow, Belfast, and Cardiff. This has to be good news.
Amid rumours of changes to the SEIS and EIS regime, there will be a doubling of the annual allowance for people investing in knowledge-intensive companies through the Enterprise Investment Scheme (EIS) and the annual investment those companies can receive through EIS and the Venture Capital Trust scheme. That’s the good news.
On the darker side, there will be a “new test” to reduce the scope for “low-risk investment”. Watch this space.”
What did you think about the Budget? Let us know in the comments section below.