Member Article

Budget 2015: North West comments

George Osborne has announced his pre-election Budget, now Bdaily presents a round up of opinions from businesses in the North West.

Our vocal North West businesses covered many of the topics mentioned in the Budget, from the ‘Penny off a Pint’ Policy to the announcement that Greater Manchester would get 100% control of its business rates.

Read on to see what our readers and business leaders thought.

Investment in the North

Richard Corran, partner at the Manchester Weightmans office, said: “George Osborne’s Budget was littered with references to fixing the roof while the sun shines and it appears that for once that sun is shining brighter in the North, with a faster rate of growth attributed to the North than the South in 2014 and with a renewed commitment to the Northern Powerhouse plan.

“The announcement that Greater Manchester is to keep 100% of the increase in local business rates as we build the Northern Powerhouse is positive, as is the general trend towards devolution. Serious investment in our infrastructure, transport, arts and culture will help support and enhance the growth that we are already experiencing in the region.

“Public and private organisations in Greater Manchester have a brilliant opportunity to create a blueprint for a successful model of regional devolution – this Budget heralds exciting times for our city.”

Graham Davidson, Managing Director of Manchester-based Sequre Property Investment, said: “Investment in the Health North initiative and chemical industry projects will accelerate employment and shine a light on the north as an area of innovation and opportunity that can compete at a global level.

“This will be further bolstered by the announcement permitting Greater Manchester to keep the money it raises in business rates, allowing it to continue driving the Northern Powerhouse forward.”

Karen Campbell, North West head of tax at business advisors Grant Thornton said: “It was a robust pre-Election statement from the Chancellor, backed by a relatively strong 2.6% GDP growth figure, and a pleasing note that the economy is expanding faster in the North than the South.

“Employment is growing fastest in the North West - a job created here every 10 minutes - which reflects the progress made in our region.

“The Chancellor’s populist measures, hardly a surprise given the deadlock in the polls, included the abolition of the tax return, replaced by a digital system.

“The news that Greater Manchester will keep 100% of increase in local business rates is a great credit to Sir Howard Bernstein and the civic leadership.”

David Grimes, managing director at My Parcel Delivery said: “It’s great to hear that the North grew faster than the South last year, and that Greater Manchester will keep 100% of business rates, which takes us one step closer to devolution.

“I was also pleased to hear about the continued effort to improve the transport infrastructure in the North West.

“There’s no denying the confidence and momentum building in the North, with more and more businesses starting up every day, but it’s a shame there were no gestures to bring down business rates altogether.

“It’s still difficult for businesses setting up shop for the first time in the UK, despite the announcement last year that rates will be capped at 2%.”

David Brimelow of Manchester based Duo UK, a polythene packaging manufacturer and supplier, commented: “It was good to hear more on the Northern Powerhouse concept in the Budget – the fact that Manchester will now keep 100% of the additional growth in its business rates is a significant step in empowering the regions and rebalancing the country away from London and the financial sector.

“It’s really positive for businesses in the North West that Manchester is leading the way in the regional devolution process; having the power to make decisions over crucial local infrastructure, coupled with the news on business rates, means we have a real advantage in generating additional growth.

“For me though, businesses can’t simply wait for politicians, whether in Westminster or locally, to take the lead, the business community itself has a real role to play . We need to work together to harness innovation and expertise, create something greater than the sum of its parts, and succeed in generating new prosperity for our region.

FSB’s Simon Edmondson said: “Once again we have seen the Chancellor focus on Greater Manchester with respect to his announcement on additional business rates. While it is yet unclear what the actual figures might be, this is great news if it means the region’s authorities are able to access a generous new source of funding.

“Of course, this extra funding will be entirely reliant on business growth, which means money levied should be automatically reinvested back into business. We look forward to a firm commitment on this from the AGMA authorities.

“On a more general note, our members will largely be encouraged by many of today’s announcements. The review into business rates is long overdue. When complete, it must deliver tangible benefits to businesses and not end up as just another report that sits on the shelf.”

HS3

Peter Vinden, managing director of The Vinden Partnership, said: “The last year has seen a lot of discussion surrounding HS3, so it would be good if the announcement today means decision-makers can speed up the Northern Powerhouse’s transition from a long-term vision to a reality.

“Connecting some of the UK’s major cities is one thing, but in order to get everyone on board, we need to see some meaningful activity that can encourage growth and investment in these areas that people can see.

“What we now need to focus on is producing quality training and deployment of the workforce to get these tracks on the ground and spur some more growth in the construction and infrastructure industries. It would also be encouraging to see some more attention paid to the smaller, but numerous, rail services and transport links throughout the regions that still require a considerable amount of TLC.”

Simon Bedford, partner at Deloitte Real Estate in the North, commented: “Plans announced for HS3 will ensure that a long held need – for greater and faster east/west connectivity is brought forward. Clearly the Northern Powerhouse strategy has helped draw more government attention to an acute problem on the overloaded transport network.

“What we need now is a fast paced implementation plan backed by clear resource allocation that will ensure businesses and the workforce feel the benefit of the investment in the near term. As with all complex transport projects the devil tends to be in the detail so hopefully the details can be resolved quickly.

“Crucial to the HS3 announcement is the plan for extended phases that will see both Liverpool and Hull included in the wider network. Given the potential for accelerated growth offered by both the Humber and Liverpool Ports we would encourage project sponsors to examine how we can do more in this area, this will surely ensure that more of the Northern Powerhouse objectives can be met through this most welcome investment.”

Charlie Cornish, Chief Executive of M.A.G, said: “We welcome the Chancellor’s ongoing commitment to improving the transport infrastructure in the North of England.

“Making it easier for passengers to get to and from airports in the North, with improved East-West connectivity and HS2, will strengthen the UK’s network of competing airports and drive economic growth right across the region.

“Manchester Airport is the region’s global gateway and it will play a vital role in connecting a Northern Powerhouse to international markets. To fulfil this potential and support the economic development of the Northern Cities and wider region, rail and road connectivity to the airport must be developed as a core component of the Government’s thinking.”

Help to Buy

Nick Lee, Managing Director, NJL Consulting said: “The new Help to Buy Isa will have a significant positive effect on house building. 25% extra being given by government to first time buyer deposits is likely to stimulate further demand in the market, with house builder shares already reacting positively.

“This will no doubt ripple through to further pressure for earlier planning consents for the industry.

“The City deal for the West Yorkshire metropolitan authorities and confirmation that Greater Manchester will be able to keep 100% of business rates will further stimulate the Northern Powerhouse initiative and with it major infrastructure and large-scale planning initiatives across the north.

“Manchester and Leeds will be critical hubs of job generation with likely positive impacts on major commercial development in these cities.

Hill Dickinson’s Associate, Tax Lawyer, Jade Chan, said: “The radical changes to the ISA system whereby the government will “top up” first time buyers’ savings spells interesting times ahead for a range of people in the North West.

“We should expect this to boost not only those individuals who are saving, but also importantly, various businesses in the construction industry from developers and building companies, to manufacturers of materials and funders. We hope this will stimulate business growth in the region.”

Professional Liverpool member Prof Peter Stoney, senior fellow and economics expert at the University of Liverpool said: “It was a good budget for fiscal discipline, but I think perhaps a mistake to stoke up housing demand by subsidising first-time buyers without expanding the supply side of housebuilding by the wholesale freeing up of green belt land; without the latter action, house prices will continue to go through the roof.”

Pensions

Head of taxation at ACCA Chas Roy-Chowdhury said: “This is not the right way to deal with long-term investment. Every year the Government steps in and moves the goalposts.

“The Chancellor should exercise caution when meddling with the pension pots of those who have been contributing to them for 30 to 40 years in many cases. They are heavily relied upon by those looking to retire and care should be taken not to jeopardise their future.

“As expected Osborne continued with the policy of greater flexibility for pensions by allowing the sale of annuities. The big challenge for the Chancellor is to create a fair market for these sales.

“What the Chancellor didn’t make crystal clear was the tax implications of withdrawing a lump sum. There is the potential for a large number of people to get quite a shock when they find out they will have tax to pay on their money should they wish to get their hands on it.”

Steve Rees, director at IFA, Carpenter Rees, said: “I do wish the pension’s political football could be well and truly booted into touch!

“Since the 2010/11 tax year, we’ve seen a total reduction of 44 per cent in the lifetime pension allowance. “In today’s Budget, George Osborne announced that the annual allowance will stay the same, but part of last years’ good work with the declaration of pension freedom has been undone.

Business rates to be kept in Greater Manchester

Conrad O’Neill, director, Canning O’Neill said: “The announcement that Greater Manchester is going to keep 100% of the increase in business rates, is positive news for the area, but we wait to see the impact of the revaluation on specific properties - there may well be winners and losers.

“What we are really waiting to hear, however, is the outcome of the pledged review of the business rates system and , in particular, what, if anything, is going to be done about crippling full rates on empty offices.”

James Thompson, head of business rates at Deloitte Real Estate, said: “The 10 authorities making up the Greater Manchester Combined Authority have a total Rateable Value of almost ï¿¡2.75 billion which would generate around ï¿¡1.35 billion – around 50% more than Wales.

“The Government has already announced complete devolution of business rates to Wales from April 2015. Wales has had limited control over the rate and transition and reliefs since devolution and as a result they have a simpler system and some would say a much better one.

“The total Rateable Value in Wales excluding the Central Rating List is just over ï¿¡1.85 billion bringing in about ï¿¡0.9 billion annually.

“The benefits to Greater Manchester of control of this funding stream will depend on the success of Greater Manchester’s economy and the level of autonomy allowed to the Authority to manage business rates.”

Nicola Rigby, Director at Bilfinger GVA said: “The Northern Powerhouse has been reinforced in today’s Budget - with welcome commitment to address rail infrastructure across the region to improve connectivity and our ability to function as a collective economic force.

“The announcement that Manchester will retain 100% of its business rates is a further statement of the key role we play – with the Government recognising the importance of giving direct control over fiscal resources to give ‘teeth’ to the devolution agenda. This is an exciting prospect for Greater Manchester, and highlights the importance of agreeing our priorities for investment in the emerging spatial framework on which locally generated money will be targeted.”

Hill Dickinson’s Legal Director, Bill Chandler, said: “While it is great news for the region that Manchester is being allowed to keep the additional growth in business rates, that will come as little comfort to all those hard-pressed ratepayers who have to wait until next year’s Budget before the government review of the business rates system launched this week will report its findings.”

Penny off a Pint

Gary Lee, Partner at Begbies Traynor said: “Bars and restaurants have been struggling across the North West recently so will welcome the cut in beer duty, and the extra rise in the tax-free allowance should help to put some more disposable income into consumers’ pockets.

“Greater regional autonomy should provide more stability for the North West in the future, regardless of which political party holds sway, creating a better environment for local businesses to grow and encouraging further external investment.

“But we have heard a lot of promises about devolution already – we now need to see some action.

“It is vital that the proposed transport integration starts to take shape as soon as possible, as this will take the most time to complete and will be a central part in driving growth between Manchester, Liverpool, Leeds and beyond.

Debt interest

Avon Representative Nadine Rowlands from Manchester said: ‘It’s great news that debt interest has been lowered. For couples in debt it can be a struggle to pay it off, never mind the interest that mounts up. My husband and I were in a significant amount of debt and thanks to our joint Avon business we were able to overcome it and our finances are finally in a good place.’

Tax Evasion

Alison Rummens of Alexander Myerson & Co said: “We welcome the penalties for the professionals that assist their clients with tax evasion. Minimising tax liabilities legally is what we aim for, it’s the evasion which need to be tackled.”

Paper Tax forms

Jane Parry – lead tax partner at PM+M said: “As expected with the General Election so close, this Budget contained few surprises and contained no spectacular giveaways.

“The announcement of the abolition of paper tax returns is a move towards online real time reporting of tax information which could – in theory - eventually remove the need for tax returns altogether.

“In practice, that is a massive task and it’s difficult to envisage quite how it will be achieved and how taxpayers will have the necessary checks and balances to be able to ensure that their tax affairs are being properly dealt with.

“It’s much the same idea as is being introduced for Universal Credits and that seems to be having a number of teething problems and taking much longer to introduce than envisaged.

North West accountancy firm Mitchell Charlesworth’s Tax partner Tim Adcock said: News that the self-assessment tax return is to be abolished whilst may initially sound favourable for businesses and individuals required to complete tax returns, the industry will reserve judgement until operational details of its online replacement become available.

Lloyd Piggott said: “The decision to abolish traditional self-assessment tax returns is a significant overhaul of the tax system and many people will be nervous about dealing directly with the tax man instead of a trusted advisor. It will also be very difficult for someone running their business to then submit figures in real time, due to time and workplace pressures.

“I believe all businesses, particularly accountancy firms such as ours, will eagerly await the announcement of firmer plans ahead of the Autumn Statement, if this overhaul is to go ahead as planned from next year.”

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