The creation of a Treasury North campus in Darlington and the granting of freeport status to Teesside, were among the measures hailed by business leaders across the region.
Many feel the measures contained in Wednesday’s budget – which also include investment in Teesside’s port facilities – will create jobs, boost the local economy, and place the region at the forefront of green technologies.
Chris McDonald, the Chief Executive of the Teesside-based research and innovation centre, the Materials Processing Institute, said: “A year ago, the Chancellor awarded our Redcar-based institute £22 million in the Budget to deliver steel and metals innovation through the PRISM programme, which is centred around decarbonisation, digital technologies and developing the circular economy.
“Our local team of expert researchers and scientists are already using this investment to develop the workstream and new technologies to support Chancellor Rishi Sunak’s commitment of Britain “becoming a scientific superpower” including offshore wind infrastructure, hydrogen hubs and the commercialisation of new investments through the Green Industrial Revolution.
“Moving Treasury North to Darlington is great for the area. The Tees Valley is one of Britain’s great industrial powerhouses so I know this Whitehall powerhouse will find ‘HMTees’ to be a great fit!
“I also welcome the news that Teesside is to be the site of the UK’s biggest freeport, which will bring investment to the area and further stimulate the development of the green economy.”
Charlene Lyons, chief executive of Black Sheep Brewery, in Masham, North Yorkshire, said: “While the VAT reduction, extension to furlough, and a share of £5bn grants for pubs are welcome, this was a missed opportunity for the Chancellor to give a boost to the much-impacted pub and brewing industry by reducing, rather than just freezing duties on alcohol. It would have fit perfectly alongside the VAT cut and been of direct benefits to pubs as the sector reawakens.
“I am also disappointed brewers have again received no help to cover the additional costs we’ve faced from dealing with the pandemic, which has put us at a real disadvantage as we look to restore our operations ready to support our pub trade customers ready for their reopening.”
George Rafferty, chief executive of energy sector business development organisation NOF, said: “Despite the circumstances that have prompted much of the content of the Chancellor’s statement, this is a Budget that presents real opportunities for businesses that are committed to supporting the decarbonisation of industry alongside helping the country meet net-zero targets.
“The eight freeports, including Teesside and Humberside and the investment in port infrastructure for offshore wind developments, together with the new Green Investment Bank will create an environment to encourage investment and innovation, which will be turbo charged by the supertax deduction that will spur growth among the supply chain.”
Geoff Hogg, Chief Executive of Middlesbrough-based property development specialists Chaloner Group, said: “Locating the Treasury in Darlington will send a positive charge through the Tees Valley stimulating so many areas of the local economy. Chief among these will be the property market with the need for new homes for relocating civil servants as well as commercial premises for companies keen to be based near the Treasury campus.
“The region has a group of experienced property developers, construction contractors and supply chains that are well placed to support the expansion that will be triggered by the Treasury being in Darlington and be a clear demonstration that levelling up the economy can be achieved.
“Coupled with the announcement of the Freeport and the opportunities that brings for local companies and attracting inward investment, this is an exciting time for the region.”
Martin Anderson, managing director of Lemon Business Solutions, which is headquartered in Stockton-on-Tees, said: “As a business leader on Teesside, I am proud of our heritage and excited about what the future will bring as the recovery from the pandemic starts.
“The Treasury move to Darlington and the development of a freeport in Teesside is fantastic news for the whole of the Tees Valley, and I am delighted that the Chancellor has recognised the unique opportunities in our area, which have been promoted tirelessly by Mayor Ben Houchen.
“The support that the government is also providing overall to the economy with new and extended grants, as well as additional loan support, will supercharge the recovery and, as a local employer, we are excited to play our part in the resurgence of our region as the powerhouse of the UK.”
Patrick Lonergan, managing director of Newton Aycliffe-based Patrick Lonergan Recruitment, said: “Today’s Budget was measured, focusing rightly on the economic recovery for small, medium and large businesses and allowing time to plan for inevitable corporation tax rises from 2022.
“The increased support for businesses to hire apprentices is welcome as, of course, is the announced investment in Treasury jobs and the freeport in Teesside. These will be instrumental in driving and sustaining the economic success of our region.”
Nic Smith, managing director of Gateshead-based Commercial Maintenance Services UK Ltd, said: “I welcome the various measures announced that will under-pin the government’s levelling up agenda, in terms of Treasury North moving to Darlington, Teesport attracting freeport status and the investment in Teesside’s port infrastructure.
“All these measures serve to address some of the inequalities experienced by this region by encouraging investment, creating opportunities and stimulating the local economy.
“I’m disappointed that the Chancellor is increasing corporation tax, it might have been more prudent to free up companies to enjoy a period of unrestrained growth following the considerable challenges of the last year.”
Lee Watson, tax director at Clive Owen LLP, with offices in Darlington, Durham and York, said: “The aim of today’s budget is to return the UK economy to pre-COVID levels by the middle of 2022 through a three-point plan. In addition, there were also important announcements for this region with the establishment of the freeport status for Teesside in addition to the establishment of a Treasury campus in Darlington together with investment in offshore wind projects.
“It was already announced that the furlough scheme would be extended until September 2021 but to further help, there are additional grants available for the self-employed and the more recently self-employed, as long as they have filed their 2019/20 tax return.
“In addition, we have seen announcements for an extension to business rates relief until June and then a discounted rate of relief thereafter. Also, the reduced 5% rate of VAT in the hospitality sector will be extended to September and thereafter increase to 12.5% (rather than immediately returning to 20%) for a further six months. It was also confirmed that the rumours regarding the current stamp duty land tax cut are true and this will continue until June.”
Corporations seemed the likely target to pay for the initial recovery, but there are some reliefs for loss making companies and incentives to encourage capital expenditure.
He added: “Most companies will need to plan for tax increases in the coming years, with the top rate of corporation tax set to become 25% from 2023. As I predicted, we are moving back to the tiered approach as the current rate of 19% will continue to apply to companies with less than £50,000 profit and a tapered rate will apply for companies with between £50,000 and £250,000 of taxable profits. Those companies incurring losses will be able to carry these back for three years, rather than one year currently and investment in new plant and machinery will be rewarded with a 130% deduction for expenditure. Some larger companies may also need to consider the quarterly tax payments regime again, especially if there are non-grouped companies under common control.”
At a personal tax level, there were no major announcements and the discussions about increases to capital gains tax, will probably not abate, at least until the autumn budget later this year.
“Most tax allowances such as the personal allowance, tax thresholds, capital gains allowances, inheritance tax allowances, pensions allowances will remain frozen until 2026, so whilst there will be no increase in those rates, the idea is that no-one should be in a worst position, compared to now.”