Chancellor Rishi Sunak promised a new post-Covid economy as he outlined the measures in his Autumn Budget.
With many of his spending plans on education, health and transport, already having been announced in the media, there were still a few surprises.
Key points include:
- Increased public spending
- Total departmental spending to rise by £150bn
- Shake-up of alcohol duty, resulting in cheaper draught beer and sparkling wines
- Universal Credit taper rate to be cut by 8%, lowering it to 55%
- £300m for parenting programmes
Business leaders across the North East and Yorkshire broadly welcomed the measures, although many await to examine the details behind the pledges.
Charlene Lyons, chief executive of Black Sheep Brewery, said: “In what has been the most challenging period in the history for our industry, any cut in beer duty by the Chancellor is welcome. The simplification of alcohol duty rates is long overdue, but more significant is the draught relief, which recognises the importance of pubs to our economy and our communities. As we look to life after covid, pubs are regaining their role at the heart of our society as places to meet with friends and family and we are pleased that this was acknowledged by the Chancellor.”
George Rafferty, chief executive of NOF, the business development organisation for the energy sector, said: “The UK supply chain will be instrumental in the creation of a low carbon economy, so any incentive to drive research and development along with investment in kit and equipment will be key to supporting the energy transition. The limit on tax relief for business R&D spending so that it only applies to domestic innovation, will also encourage greater investment in the UK and strengthen the position of the supply chain as a global leader in helping to achieve net zero.”
Simon Bailes, of Simon Bailes Peugeot, which operates dealerships in Stockton, Guisborough, and Northallerton, said: “It’s very positive news that the country is in a much stronger economic position than expected as the automotive sector’s fortunes, along with many others, are strongly linked to consumer confidence.
“I was particularly pleased to hear the Chancellor announce additional support for the retail, hospitality, and leisure sector, with a one-year 50 percent business rates discount. This sector, which includes car dealerships, have faced particularly difficult challenges during the pandemic.
“Obviously as a business which is based on the sale of cars and vans, the continuing freeze on fuel duty is to be welcomed. Any increase would have constrained economic growth by creating additional costs for both businesses and consumers.”
Bob Borthwick, a director of Stockton-based haulage, plant hire and recycling specialists Scott Bros, welcomed the freeze on HGV excise duty and a planned rise in fuel duty.
He said: “Our costs have risen dramatically in recent months due to the soaring price of fuel, so anything that prevent overheads rising further is a relief to a wide-range of businesses that are transport reliant.
“We are investing heavily in the circular economy and in recycling and reusing materials in the construction industry and recently began work on a £4m wash plant to increase production of sustainably sourced sand and aggregate, so I was heartened by the Chancellor’s pledge to provide extra funding for research and development and green technologies.
“However, I hope smaller companies such as our own, which are at the forefront of such innovation, will be in a position to access this cash.”
Bennet Hoskyns-Abrahall, Commercial Director of Gateshead-based Commercial Maintenances Services UK Ltd, said: “I was particularly encouraged by the Chancellor’s announcement on investment relief to encourage more businesses to adopt green technologies, such as solar panels.
“As a nationwide leader in facilities and commercial building maintenance and an established provider of green technologies, I believe this will incentivise businesses to hasten the move towards a low carbon economy. Such a transformation is also vital to the UK achieving its 2050 net zero commitment.
Nicky Jolley, founder and managing director of Darlington-based HR2day, said: “Throughout the pandemic, small businesses across the nation have been working tirelessly, against all the odds, to keep the British economy afloat. The Chancellor’s announcement on the Real Living Wage today presents a real difficulty to many small businesses whose margins are already stretched. With inflation expected to average four per cent into next year, many employers will face a difficult decision between protecting their bottom line or creating more jobs.”
Martin Anderson, chief executive of Stockton-based Lemon Business Solutions, said: “Recently, I was pleased to announce that my business is moving to pay at least the Real Living Wage to all employees out of probation. It is something, as a socially conscious business, I believe is fundamentally important and ensuring that wages in the North East are nationally competitive, must be fundamental to the government’s wider ‘levelling-up’ agenda. I am delighted to hear the Chancellor make the same move today, in increasing the National Living Wage rate to the Real Living Wage rate of £9.50 per hour across the UK.
“However, in the future, I would like to see the Chancellor go further with the scrapping of the age brackets, so a fair and equal wage is also paid to those under the age of 23, creating greater opportunity for young people to save for important life purchases, such as their first car or home deposit.”
Lee Watson, a tax partner at Clive Owen, which has offices in Durham, Darlington, and York, said: “Spending was at the top of the agenda as Rishi Sunak hailed it as an ambitious budget for a post covid-19 world. There was much talk of “levelling up” but attention will need to be paid to the detail in the documentation that is released over the coming days as he confirmed that everyday spending will be paid for by taxation.
“Welcome announcements were made, on investments in the road and rail networks, education and the local pub! From a tax perspective, on top of the already known increases to corporation tax from 2023 as well as dividend tax and national insurance rises from next year, it was also confirmed that the new residential property developers’ tax will be introduced but that corporate tax reliefs would be available for R&D expenditure on cloud computing and data. Relief is extended under the Annual Investment Allowance scheme too.”
Matt Hewison, chief operating officer of CyberWhite with offices in Middlesbrough and Sunderland, said: “The Chancellor’s commitment to innovation outlined today is a step towards creating a competitive niche, and advantage, for the UK economy. In the North, we have the potential to stand at the forefront of the green and other emerging markets. Deployment of innovation funding must go hand in glove with levelling-up to ensure this happens.”
Elizabeth Armstrong, managing director of Darlington-based Latimer Hinks Solicitors, said: “I am pleased that the Chancellor has not increased either Inheritance Tax or Capital Gains Tax which would have been a relatively quick windfall for the Treasury. Instead, he has, rightly, introduced a raft of measures to support both small businesses and the lowest paid.
“The Chancellor’s commitment to ‘levelling-up’ was reaffirmed today, a policy which, here in Darlington, is already starting to pay dividends.”
Dr Arnab Basu, CEO of Sedgefield-based Kromek Group plc, said: “The announcement on research and development funding marks a great step towards ensuring that the UK’s future economic potential, to be a global player in emerging technology and innovation is realised. However, this still falls a bit short of the 2.4% R&D spend, as a percentage of GDP, for which the Department for Business Energy and Industrial Strategy, has previously made the case. The US and German rates are currently at around 3 per cent of GDP, so we have a way to go to ensure the UK remains globally competitive.
“The initiation of Advanced Research and Invention Agency is fantastic news which will provide a real boost in targeted areas of innovation. However, it is important that the government plays a crucial part in creating an ecosystem in which British innovation can be adopted and scaled-up here in Britain by using levers such as regulations and procurement.”
Rosemary Du Rose, Chief Executive of Beyond Housing, said: “In his Budget today, the Chancellor recognised that, notwithstanding an improved economic outlook for the economy, a spike in living costs is inevitable. As such, his increases to the living wage and tweaks to the tapering of Universal Credit will mean that, those who earn the least, will see some real benefit. We also welcome the announcements on affordable homes and brownfield renewal programmes to help increase the housing net supply that is needed each year.”