Autumn Budget 2017: Reactions from across the North West

Chancellor Philip Hammond took centre stage at the House of Commons on Wednesday afternoon (November 22) to deliver his Autumn Budget speech.

A raft of the announced measures could unlock long-term economic benefits for the North West – in particular, a new £1.7bn Transforming Cities Fund that could improve transport infrastructure in the Liverpool City Region and Greater Manchester.

The eight-figure pot would be shared between the six areas of the UK with elected mayors, with the rest up for grabs for other cities.

Also of significance for the region is the announcement of £30m for trialing new solutions to improve mobile and digital connectivity on trains along the TransPennine route.

Business leaders from across the North West are already reacting to the Chancellor’s speech. Here’s what they have to say:

Northern Powerhouse and Industrial Strategy

Paul Shannon, CEO at ANS Group (Manchester)

“Today we’ve seen that the government is truly committed to investing in the country’s digital future. The Transforming Cities Fund is one example of this, which will help promote existing and future tech hubs across the region.

“This should contribute towards cementing Manchester’s position as the city of digital and tech innovation.

“If we want the UK to remain a leader in the digital revolution, we need robust infrastructure in place, along with a strong pipeline of new technologies to drive business success.

“The technological landscape is ever-evolving and, as a tech business leader, I’m grateful to see such a large proportion of this year’s budget relating to much needed investment in next generation technology.”

Andy Levers, Virtual Engineering Centre, technical director for LCR 4.0

“Today’s Budget announcement has solidified what we already knew – Britain is at the forefront of the technological revolution. The North West, and Liverpool in particular, has received great recognition for the role it’s played in this, including that of the LCR 4.0 project, delivering tangible results to a long list of SMEs within the region.”

Simon Reid, sector manager for advanced manufacturing at the Liverpool City Region LEP

“I welcome the Government’s focus on productivity and research and development. In the Liverpool City Region, we have been focusing on manufacturing productivity growth since 2013 and the transformative effect innovation can have on the earning potential of a company. By helping small and medium sized companies to adopt industrial digitisation to innovate products, processes and access new markets, we can close the productivity gap with the rest of Europe and the world.

“I look forward to the Industrial Strategy White Paper on Monday with great anticipation, especially in relation to the possible adoption of the Made Smarter Review and the recommendation of a North West Industrial Digitisation pilot. The North West is the largest UK manufacturing region by output as well as being home to a rich ecosystem of digital assets and companies. Harnessing the strengths of these different elements of our regional economy will blaze a trail for the rest of the country by building on the great start that programmes, such as LCR 4.0, have made.”

Investing in innovation and skills

Lee Dentith, CEO and founder of Now HealthCare Group (Manchester)

On the announcement of £20m for AI development and education, £45m invested in PHD students and £9m to an AI advisory body

“This is a good start and will work towards ensuring the UK stays at the forefront of technological innovation. Digital Health is one of the hottest sectors in the tech mix and is disrupting patient care in new and exciting ways.

“AI is vital in transforming the health of our nation and so R&D investment from PHD student level onwards, will help us and other digital health businesses develop pioneering solutions to tackle health problems.

“We believe in augmentation with our AI and technology strategies - to ultimately help ease the burden on the NHS and our GPs. It will be interesting to see how the AI advisory body engages with industry and how big data fits into the bigger picture.”

On £100m invested into training 8,000 computer science teachers

“We have a burgeoning tech scene in the UK and this can only be a positive step by the government. Technology and the digital health industry in-particular, is moving at a rapid pace and the gap between what the tech industry demands and what is and can be taught in education, is vast, so this will go some way towards ensuring that future generations of talent are tech industry ready.”

Dr Nick Goldspink, N8 Research Partnership

“The N8 universities are a key element of the business, innovation, and skills eco-system in the North of England; they support nearly 120,000 jobs, around 200,000 students at any time and work with industry to translate research to new marketed technologies. We are delighted to see the additional investment in research and development as well as investment in Northern connectivity – both key drivers for collaboration and economic growth in the region.”

Ed Dwan, partner and head of BDO (North West)

“There’s no doubt that placing the onus on innovation and investment to support high potential businesses is the key to unlocking some growth. As a nation and region it’s clear we need to embrace innovation to create a new economy.

“The updates to R&D relief will be welcomed by those businesses already disrupting their industries. Hopefully it will also encourage all businesses to consider whether they already qualify and therefore should be claiming this relief. This could also go some way to incentivise businesses to innovate further to achieve growth.

“We hoped to see, and were pleased with the announcement to increase access to patient capital for innovative scale-ups.”

Martin Balaam, CEO at Pimberly

“The focus on digital skills and training is promising and I’m pleased to hear that £500m is going to be invested into a range of tech initiatives, and that £84 million will be spent to treble the number of computer science teachers.

“Northern Powerhouse is on the agenda again after slipping off the radar for a while. As ever though, the proof is in the pudding and only time will tell if these infrastructural initiatives actually come to fruition and make a genuine impact on businesses in the region. Ultimately productivity is at a low, and we’re going to need more than good WiFi on Transpenine trains to improve this.”

Alan Price, employment law director at Peninsula

“The Chancellor confirmed National Living Wage will increase from £7.50 to £7.83 per hour from April 2018. All rates of the National Minimum Wage will also increase from next April, in line with the Low Pay Commission’s recommendations. This early confirmation ensures employers have sufficient time to plan for the wage increases, both financially and administratively. Following an increased focus on enforcement in this area, failing to pass on these increases puts employers at risk of being publicly named and shamed or facing financial penalties. Even a one day delay will create liability.

“Further focus was also given to providing skilled workers for businesses. The government is launching a National Retraining Scheme which will provide workers with the opportunity to re-train during their working lives, ensuring they have the skills for future workplaces. They have also reiterated the commitment to have 3 million apprenticeship starts by 2020 whilst announcing they will review the flexibility that employers have to spend their apprentice levy payments. This could potentially increase the time employers have to spend the levy, or allow more flexibility for group organisations to share their payments, to ensure organisations who pay the levy can spend it in a way that benefits their workforce.”

Digital connectivity

Claire Jolly, head of TMT at Deloitte in the North West

“Connectivity is the foundation for modern businesses in every sector, and this clear, specific commitment to providing next-generation 5G mobile networks is exactly what the Northern Powerhouse needs in order to thrive.

“It’s highly encouraging to see the government’s recognition that 5G, in addition to ensuring the high performance of these networks, will form the base upon which businesses can build their digital capabilities.

“Improved connectivity should help businesses across the North West, and the UK as whole, to speed up their operations, boost productivity and grow both their organisation and the economy.”

Property and housebuilding

Chris Taylor, managing director of Regency Residential

On the cuts to Stamp Duty

“There’s no hiding from the fact that the combination of Brexit and Stamp Duty changes have impacted the London property market in particular – the positive effect being that people have looked to either relocate to or invest in other areas of the country, such as Manchester or Birmingham.

“I welcome the proposed cuts to Stamp Duty for first-time buyers, if ultimately it will make it easier for people to save for a deposit.

“A typical deposit for a mortgage is 10 per cent on a house valued at £240,000, which includes a staggering £4,800 for Stamp Duty. Essentially, we’re currently talking about people saving for an average of 24-months before they can get on the property ladder. This clearly needs to change.”

On planning

“If Hammond is to be believed, the government plans to galvanise housebuilding and deliver 300,000 new homes a year. However, our arduous planning processes are negatively affecting the market in more ways than one, despite councils’ attempts to rectify the underlying issues with the system. Councils haven’t been given the budgets needed to deal with the increasing number of planning applications, which is causing a delay in bringing new homes to market and pushing up house prices as demand outstrips supply.

“The lengthy and costly procedures involved in pre and post planning applications mean that developers are battling against an overly time-consuming, expensive process. If the Chancellor were to go further and give councils the green light to increase planning fees by, say, 20% to fund a speedier and more efficient process, many developers would be happy to pay it if it means we’d be able to bring more homes to market.”

Jonathan Wrigley, managing director of HBV

“The injection of £44bn into the housing market to deliver more homes is a positive step. We’re looking forward to working with the HCA and Homes England to ensuring some of this is invested in our sector.”

Karen Campbell-Williams, senior partner at Grant Thornton (North West)

“The Chancellor said that the number of 25-34 year olds owning their own home has dropped from 59% to 38% over the last 13 years. That’s a depressing statistic and let’s hope abolishing Stamp Duty for so many first time buyers really does help and provides an incentive. It’s a bold move which will benefit first time buyers spending up to £500k ,presumably to reflect London prices. The limit was previously £125k - so someone buying for £300k is going save £5k. If you are a first time buyer there are still saving for purchases up to £500k.

“The £44 billion additional funding for a range of measures to support the building of new homes, including much-needed construction skills.

“Our society needs to work for everyone so it was good to see the chancellor announce £28m for three new ‘housing-first’ pilots in Manchester, Liverpool & the West Midlands and a new homelessness task force to eliminate rough sleeping by 2027. Andy Burnham has pushed for this and appears to have been listened to.”

Tom Selby, senior analyst at AJ Bell (Salford)

“The lack of any blockbuster Budget announcements for UK savers shows that Chancellor Hammond is hamstrung by a crippling combination of worsening growth forecasts, a weak government and stalling Brexit negotiations.

“The stamp duty relief for first-time buyers will be a welcome boost to people purchasing their first home, but the impact will be felt disproportionately in the south of England.

“In the North, the average house price for first-time buyers barely exceeded the previous stamp duty threshold so the benefit for many people will be almost non-existent.”

Taxation

Tony Medcalf, head of tax at MHA Moore and Smalley

“Lower earners will welcome the slight increase in the National Living Wage and the increase in the income tax personal allowance to £11,850 from April 2018. Higher earners will also benefit from an increase in the higher rate tax threshold to £46,350.

“The chancellor also pledged to keep the VAT threshold at £85,000 for a further two years which will be a relief to many small and start-up businesses, as many experts were tipping this to be reduced.”

Gary Lee, partner at Begbies Traynor (Manchester)

“Given the embarrassment of having to make a U-turn on his last budget, we didn’t expect any major new fiscal policy changes this time around.

“And while many will be relieved at the lack of significant reforms, changes to the way business rates are calculated will be particularly welcomed.

“Our latest Red Flag Alert data shows the number of North West firms facing significant financial distress had grown by more than a quarter year-on-year.

“With that in mind, bringing forward the switch from using the consumer prices index (CPI) to the retail prices index (RPI) by two years will be a welcome relief for many firms.

“Retailers especially, who are on the front line as shoppers tighten their belts, might otherwise have been staring into the abyss had it gone ahead.”

Dean Ward, co-founder and chief technology officer at Evoke Creative

“While not a giveaway budget, the R&D tax credit increase is welcome news. It will be well-received by innovative SMEs working in the UK’s digital technology sector. So too will the £500m pot of funding being made available to support the development of transformative technologies like AI and machine learning.

“But as a growing and internationally trading business, shipping our digital kiosks not only across Europe, but also to China and the USA, there was little reassurance that the government has a firm plan to support British exporters in the face of Brexit.”

More to follow.

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