LAST week saw Chancellor George Osborne deliver his Emergency Summer Budget, writes Ted Salmon, FSB North-East regional chairman.

Like most Budget announcements, a lot was trailed and leaked in the run up to the speech.

The good news for small businesses in the region is that there were welcome announcements to reduce corporation tax, fix the annual investment allowance and increase the employment allowance.

These have been responses we have been pressing the Chancellor for in every Budget submission over the past five years.

There was also the usual rabbit from the hat trick that most Chancellors like to perform to catch the headlines or garner support from the backbenches.

For many small businesses across the North-East this trick wasn’t exactly magic.

Small businesses are at the heart of the regional economy, employing 360,000 staff and contributing £26bn to the economy.

The introduction of a new National Living Wage for over 25 year olds, set at £7.20 an hour from next April, will pose significant challenges for many small firms, particularly those in the hospitality, retail and social care sectors.

Interestingly across the North-East, there are already some clear disparities on the living wage.

For example, some in the public sector in the region pay the national living wage whilst others adopt a local living wage.

Too often the adoption of the living wage is paraded by some as the panacea to all economic ills. Analysis already undertaken by the Office for Budget Responsibility shows that the introduction of a National Living Wage could potentially see 60,000 job losses.

Alongside this unfortunately for many small businesses the increase in the employment allowance won’t fully offset the increase in costs brought by the national living wage.

Couple these changes with the increasing pension contributions that many small businesses will face and the next couple of years will be extremely challenging.