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Mar 16, 2015 #North East
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Ross SmithTHE North East must be empowered to deliver more if the region is going to be at the forefront of a Northern Powerhouse.


The North East Chamber of Commerce has called on the Chancellor to use the upcoming Budget to introduce policy designed to leverage the North East’s strengths to far greater effect rather than continue to hinder its progress.


In the pre-Budget submission to George Osborne, NECC Director of Policy, Ross Smith says decisions need to be more responsive to local and regional economic conditions if the North East is to succeed and build on the economic momentum gathered in recent months.


In order to promote the North East as an integral part of the Northern Powerhouse, the NECC continues to push the Government to prioritise investment to unlock access to major employment centres and international gateways.


It’s hoped upgrades previously announced for North East roads will be carried out as soon as possible and the NECC will continue to back Heathrow airport as a national asset. The membership organisation is also fully behind the recent £15billion Transport for North proposal.


“TfN represents a massive opportunity for the North of England. It will not only help improve investment in Northern transport infrastructure, it will help us fight collectively for a bigger slice of the cake as a more effective counterweight to London and the South East. We back IPPR North’s request to George Osborne to use this budget to create a £15 billion transport devolution package. This is absolutely necessary to fire up the Northern powerhouse.


In spite of progress, the UK economy remains too geographically imbalanced. “North East businesses know they can make a stronger contribution and we require policy to support this,” said Ross. “We face many challenges in the coming year, but I believe these can also be used as opportunities.


“The North East is uniquely exposed to a Scottish economy with powers to increase levels of inward investment support and reduce taxation, diverting investment and activity from the North East. Generating growth against the pull of such incentives is incredibly difficult.


“Greater regional devolution will enable local decision makers to develop policy with better and more locally relevant information. With meaningful resources there is a strong case for devolving finance and decision making powers to regions such as the North East.”


NECC raised concerns about potential future skills shortages. The organisation’s latest Quarterly Economic Survey shows members consistently cite skills as a barrier to growth.


“The future of funding support for skills remains uncertain,” said Ross. Businesses fear proposed changes would place funding with employers and will lead to significant bureaucratic hurdles for SMEs. We want the Government to adjust funding for apprentices and hope to see a more appropriate set of proposals brought forward.”


NECC has urged the Chancellor to bolster the North East economy.


“Our economy has more strength and depth than ever before,” said Ross. “As well as an international trade record better than any other part of the UK, real wages are among the highest in the country, while productivity and the overall cost of doing business make the North East a great asset for the national economy.


“If we are to maintain a strong record as an internationally trading region with a positive balance of trade, the region’s exporters must receive more support. To realise the Government’s target to source 500 new North East exporters by 2020, the UKTI budget should again be increased with enhanced flexibility in spending at a regional level.


“We also need a better joined up offer from Government support organisations, including the Manufacturing Advisory Service, Growth Accelerator, Innovate UK and UKTI.”


This has been echoed by David Elliott, tax partner at KPMG in Newcastle. He said:


“Creating conditions that stimulate innovation, investment and employment has got to be the primary objective of any government’s tax regime. Our clients are broadly pleased with the direction of travel in UK legislation: they don’t want headline grabbing initiatives. So the message to the Chancellor is to focus on improving and simplifying.”


Making more of existing North East resources is a recurring theme in the NECC’s budget submission. Ross said: “The UK has abundant energy resources yet they are not being exploited and uncertainty over subsidies and planning hinders investment.


“The Government must be better focused on developing measures that will encourage investment in both offshore and onshore wind. Carbon capture and storage is vital but successive Governments have failed to grasp this opportunity.”


Development is high on the agenda too. The North East’s capacity for development is vast, with an abundance of potential development land, great resource availability and lower population densities. Ross added: “The North East should be a prime development area, but policy and economic conditions must be conducive to capitalise on potential.”


“Housing need and barriers to delivering more homes are different in each region. Policy must be attuned to these differences and formulated with the active involvement of regional stakeholders who understand the market. Any assessment of the national housing market for judging national policy should exclude London, which is a unique market within the UK that distorts the national picture.”


Ross said: “Championing the North East as a major asset for UK PLC; meeting our future skills needs; supporting business and driving growth drives growth; world class connectivity and energy infrastructure; and tackling the cost of doing business remain at the forefront of what the NECC does for its members and this is what we have addressed in our ask of the Chancellor.”


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