Member Article

NECC – Full Budget Reaction

Pro-business budget but concern over the region’s involvement in Northern Powerhouse

The North East Chamber of Commerce (NECC) has welcomed measures in Wednesday’s emergency budget to reduce tax on businesses, but concern was raised by the omission of the North East in regards to the Northern Powerhouse.

Reducing tax on businesses and the extension to the Investment Allowance.was a key ask in the business membership organisation’s pre-budget submission to the Chancellor. Nevertheless, NECC remains concerned at George’s Osborne’s lack of referral of the North East

Jonathan Walker, Head of Policy and Campaigns at NECC said: “Today’s Budget continues a clear direction of travel started by the Conservatives in the last government.

“However, it sees other parts of the country move ahead of the North East in securing a devolution settlement and we need to know why this is the case. It is of the utmost importance that the region makes significant progress in this area as soon as possible to avoid being left behind.

“The business community is united in its desire to see the North East prosper. We are therefore keen to explore all options that would enable a meaningful deal to be secured, including the possibility of an elected mayor. This deal must equip the North East with the necessary tools and responsibilities to shape its own economic future.”

The reduction of Corporation Tax to 18% by 2020 was welcomed by NECC. “This will be a valued boost to our members and will make the country more attractive to investors, but more needs to be done to support inward investment to the North East, especially as our region faces exposure to devolved funding flexibilities in Scotland.”

The Chancellor’s ambition to increase the number of apprenticeships was also taken positively, but there are concerns about how the proposed levy will operate. “We’ll be keen to hear more details as to how this will work in practice and will be wary of over-regulation,” said Mr Walker.

“We look forward to being involved in conversations with the government as to how this measure will be used to introduce more apprenticeship opportunities whilst avoiding a two-tier system between large organisations and small businesses.”

George Osborne’s plan to increase Living Wage to £9 per hour by 2020 will have an effect on many NECC members. “The NECC encourages its members to reward their employees with a fair wage and believe any minimum wage levels should be established according to standards set by the Low Pay Commission,” said Mr Walker.

“Our members will want assurances that the burden on smaller firms will be minimised, as any adjustment will hit them the most. We welcome the proposals to alleviate the impact through the tax system and urge the government to consider the views of small businesses when implementing this policy.”

With regards to Transport for the North, Mr Walker said: “We welcome a statutory footing on this matter, but it is crucial that all areas stand to benefit, including the Tees Valley.”

Also commenting on Transport for the North, Chris Hearld, chairman for KPMG in the North, said: “It was incredibly disappointing that no further announcements were made regarding investments in our regional transport infrastructure. While the introduction of an Oyster card system across the North is a nice gesture in principal, it will do absolutely nothing to alleviate the lack of capacity and very little to improve the connectivity on our region’s ever-crumbling rail network.

“Businesses across the North are becoming increasingly impatient, and are chomping at the bit to play their part. But their role must be underpinned by dramatic improvements to the transport infrastructure across the region to ensure our businesses, people and resources are better connected. Without this, the Northern Powerhouse will not take off.”

To keep updated visit necc.co.uk or follow NECC on Twitter @nechamber.

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