Partner Article

North East reacts to mini-budget including announcement on Tees Valley investment zone

Businesses and organisations from across the North East have reacted to the mini-budget announced today (23rd September) by Chancellor Kwasi Kwarteng.

Measures include a cut in basic income tax to 19% from next April, the abolition of a 45% higher rate of income tax in England, Wales and Northern Ireland, and the cancellation of a UK wide hike in corporation tax which was due to rise from 19% to 25%.

The Chancellor also said the government plans to set up 38 investment zones in England, one of which, he said, will be in the Tees Valley – attracting tax cuts and liberalising planning rules. The zones will also benefit from zero business rates and a waiving of stamp duty.

Reacting to the mini-Budget Chris Beaumont, partner at Clive Owen LLP, said: “The Tees Valley appears to be a real winner in this ‘mini-budget’ with the announcement of an investment zone, which will deliver a number of significant benefits. Our region, and its fantastic cohort of businesses will I am sure embrace the opportunities offered. It is an exciting time to be living and working in Tees Valley and as a firm we demonstrated our confidence with the opening of a new office in Middlesbrough last year, which has already grown by over 25% in less than twelve months.

“The Chancellor also made a number of other announcements, including changes to corporation tax, investment allowance, stamp duty, IR35 and the abolition of the 45p tax rate which will affect our clients, and this is something our tax experts will communicate to them to ensure that they take advantage of the new measures.”

Aman Chahal, Chief Executive Officer of Stockton-based TaperedPlus, a specialist in the design and supply of flat roof designs and insulation, welcomed the Chancellor’s announcement on the creation of almost 40 investment zones nationally, including the Tees Valley

He said: “Chancellor Kwasi Kwarteng is vowing to make it easier to build with construction front and centre of his vision for “a new era for Britain”. Anything that maintains the momentum of the levelling up agenda already underway in this area is to be welcomed, although I hope the zone will extend across the entire Tees Valley.”

“For my own industry (Specialist Building Products) I also welcome measures to streamline the planning system together with the reduction in tax rates that will benefit both businesses and their employees alike by generating growth and investment.”

Joanne Leng MBE, chief executive of NOF, the business development specialists for the energy sector, said: “The Investment Zones could be an important part of the jigsaw to attracting companies to areas that are playing a key role in the next generation of the energy industry.

“Various locations in the North East of England are already building on their track record in established sectors like oil & gas and offshore wind to support new and emerging low carbon technology solutions, such as hydrogen and CCS, and these zones will undoubtedly give a boost to supply chain clusters.

“The benefits offered in these new zones can provide fresh impetus to the development of new innovative solutions for the energy sector and emerging markets such as floating offshore wind by providing attractive locations for investment.”

Ben Quaintrell, the founder and managing director of Darlington-headquartered estate agency group, My Property Box, said: “I welcome the Chancellor’s measures to cut stamp duty that will support more people and families across the North East and North Yorkshire to own their own home.

“Currently there is no stamp duty to pay on the first £125,000 of a property’s value, a band that has now risen to £250,000 – which will benefit many, many more homebuyers.

“In addition, he has increased the stamp duty threshold for first time buyers from £300,000 to £425,000, which won’t affect the majority of people in the North East, where the average house price is around £170,000, but it will still act as a stimulant to the economy.”

Karl Pemberton, chair of Institute of Directors North East (South) and managing director of Active Chartered Financial Planners in Stockton said: “Many in our region really feared for the levelling up agenda, however today’s announcement is a real statement of intent that the Tees Valley remains a key area for change, innovation and business. The next six to twelve months are going to be a challenge for both individuals and businesses and any optimistic news will give the region a boost.

“I’ll be interested in the details because my only concern would be potential displacement for businesses that are local but fall outside of the ‘zone’. We need to ensure that there are benefits for everyone and jobs created, not just moved from one place to another.”

Gareth Hooper, CEO of DPP Planning, said: ““Rather than removing an obstacle to attracting investment, relaxing planning rules in the new investment zones appears to be seeking to address the public and business misconception that it is a significant barrier to achieving growth.

“The risk of such an approach of unregulated development is the creation of buildings and places, which are of low quality that, in the longer term, put off investors.

“The planning process can add value to development and investing in properly resourced local authorities to enable them to determine applications quickly would, in our view, be a better approach to delivering high quality areas for business growth.”

Matt Hewison, director at CyberWhite, which has an office at Boho 4 in Middlesbrough, said: “Over the past few years, Teesside has carved out a niche as one of the UK’s hubs of industry, so it’s very apt that parts of our region should be given ‘investment zone’ status.

“Areas like Boho, where we’re based, already attract businesses and encourage people from the region to ‘stay local’ when setting up a fledgeling firm. Benefits such as those associated with investment zone status, will only go further to make Tees Valley the business capital of the country.”

Dr Huw Williams, headmaster at Yarm School, said: “I’m very pleased to see that the government has immediately shown it is still committed to increasing the opportunities for growth and development in the Tees Valley, which has benefitted in recent years from being a key focus of the levelling up agenda. With investment zones for Teesside in today’s statement, it’s clear to see the region is set for further growth in the near future.

“While we’re not the most obvious beneficiaries of this announcement, schools are preparing young people for the world of work, and it is so important that our students see exciting employment and career opportunities in their own region. We currently have a great deal of talent, aspiration and optimism coming up through the education system, and it’s fantastic to see efforts being made to keep them here or tempt them.”

This was posted in Bdaily's Members' News section by News Gathering .