George Rafferty, Chief Executive of NOF Energy said: “Although not a prominent part of the Chancellor’s speech, the Government has committed to expand the North Sea investment and cluster allowances it set out in the March Budget, which will hopefully inject fresh confidence into the industry. While we await the detail, it is clear there is a combined ambition between the Government and the oil & gas industry to maximise economic recovery from the UK Continental Shelf.”
Penny Marshall, Director of the Institution of Civil Engineers (ICE) North East, said: “The renewed commitment to the northern powerhouse, and efforts made to identify new ways to fund local roads are encouraging. The Chancellor is absolutely right; Government must be bold in its commitment to infrastructure if the UK is to achieve a rebalanced economy, increase productivity and maintain our competitive edge. We hope this also translates into bold decisions on aviation capacity, resilience and our future energy mix.
“Bold and strategic investment choices are also needed. We are at a critical point – the scale of the UK’s needs is large and growing yet public finances remain tight. As the spend review approaches, we hope to see Government make decisions for the long-term.”
Gillian Marshall, Chief Executive of the Entrepreneurs’ Forum, said: “The setting of the Enhanced Annual Investment Allowance at £200,000 on what the Chancellor described as a permanent basis is good news, not least because it allows businesses to plan their future investments. Coupled with the future plans for reductions in Corporation Tax to an 18% low in 2020 and investment in roads, this is good news for business and the economy. However, the lack of any reference to the North East in terms of progress on devolved powers was worrying and shows that we have catching up to do.”
Charlie Foster, Senior Manager – Taxation Services at North East business advisors and accountancy practice Ryecroft Glenton, said: “For a Budget that was supposedly not going to focus on business, there is a lot for employers to digest that will have an impact on their enterprises. Confirmation that the expected cut in annual investment allowances in plant and machinery to £25,000 has settled at £200,000 will deliver business confidence.”
Charlie added: “The much-heralded increase in Inheritance Tax thresholds, along with the increases to personal tax allowances for the lowest paid and those paying the 40p rate will be welcomed by many although the reduction in tax relief on pension contributions will not be popular with high earners.”
Commenting on measures announced in yesterday’s Budget Iain Sim, chief executive of Coast & Country, the largest Registered Social Landlord within Redcar & Cleveland, with a current rental housing stock of more than 10,000, said:
“The ‘reform’ of social housing rents for higher earners is certainly headline grabbing but it needs to be considered in context with the other welfare reforms going on and how they are affecting people.
“The Government’s stated objective is to take people out of poverty but if rents increase too much this could pull people back into hardship. More working households are living in poverty in the UK than non-working ones and increases in rent could exacerbate this situation.
“In parts of the North the differential is very low between social affordable and market rents so the money saved will be lower than other areas; however the impact might be to make the individual tenants worse off.
However we really need to see the detail, and take a view on the cumulative impact of all the various measures that the Chancellor announced before commenting on the impact of this one change.
“Unfortunately Coast & Country’s Money and Benefits Advice Team already assists many individuals who are struggling to make ends meet and I haven’t seen anything, so far, which will change that.”
Business Battle-Axe, Amanda Vigar, managing partner V&A VIGAR (Darlington) LLP, has backed Budget announcements that will support small businesses, but warned that some of the new measures that could slow economic growth.
Amanda, who has a blog called the Business Battle-axe (http://businessbattle-axe.blogspot.co.uk/), said: “This is a mixed Budget for businesses. The cut in Corporation Tax to 19% in 2017 and 18% in 2020 is great news for the British economy making the UK one of the lowest tax regimes in the world to do business. This will encourage both home and foreign investment into UK business, in turn leading to more jobs which are vital to the growth of the economy.
“The new Apprenticeship Levy for large employers welcome move as it feeds into the creation of apprenticeships by SMEs. At last the government is doing something that directly helps small businesses. The government target is to create an additional 3 million more apprenticeships this year and this is a good way of helping small employers grow their staff without taking on a huge financial burden.”
Amanda added: “Whilst, from an employee perspective, I support the creation of a Living Wage, I am not convinced that many smaller businesses will actually be able to afford such a large leap in wage costs. The Government is saying that the NMW will go up to £7.20 from next April and to £9.00 from 2020 for those aged over 25. A lot of SMEs are still living hand to mouth in a still very uncertain economy and over the next few years are already having to factor in extra costs with the introduction of auto enrolment pensions. I suspect that it will discourage those smaller businesses from taking on new staff, which will stifle growth in this region.”
In addition, Amanda was disappointed by the lack of action on late payment. “Probably the biggest issue to small businesses is cash flow. I believe that much work is still needed to be done” to tackle the crippling effects of late payments to SMEs”.
Bryan Bunn, Managing Director at the Nortech Group, a successful professional engineering design and project management company based at Wynyard, commented: “The crucial importance of the North Sea oil and gas industry cannot be over-estimated. There is only one significant announcement in this Summer Budget for the energy sector and it’s short on detail at present. The removal of the climate change levy on renewables could well encourage growth in the sector, however we do need more detail on this measure.
“There is little doubt that the government believes in making the most of the UK’s oil and gas resources, including the safe extraction of shale gas. Building on action set out in the March Budget 2015, it’s to be welcomed that the government will expand the North Sea investment and cluster area allowances to include additional activities which will maximise economic recovery. The government will also bring forward proposals for a sovereign wealth fund for communities that host shale gas development.”
He added: “On a general level, for potential North Sea investors, all the signs are that the smart money is on further significant oil and gas discoveries in the North Sea.
“The UK does have one problem, however. Should it focus on developing its own potentially world class shale gas reserves, its deep-water discoveries in the South Atlantic, or simply stick with the North Sea which forever keeps re-inventing itself”