Businesses and leaders from across the North East have been reacting to Chancellor Jeremy Hunt's first Budget, which hoped to show progress as well as substantial repair work.
Nigel Emmerson, Partner and head of law firm Womble Bond Dickinson’s Newcastle office said: “Whilst the Chancellor’s announcement and associated measures will be perceived by many as painful, the tough decisions made leading up to today’s announcement certainly seem to have long-term financial stability for the UK economy at the heart. Right now, stability is what the region’s business community needs most as we all prepare for the challenges that come with a period of recession and economic strain.
Read more The Autumn Statement as it unfolded
With detail around some key announcements yet to be made available, there was no silver bullet announced for businesses or individuals in relation to rising costs. The focus on energy efficiency, education and the NHS were rays of light, but confirmation that the planned investment zones will be pulled may come as a blow for the levelling up agenda, although we wait with anticipation to learn what the government now considers to be the country's knowledge-intensive clusters with the highest potential for growth and where the corresponding local research strengths sit.
“It was, however, encouraging to hear plans for a new devolution deal for "an area of the North East”, which should bring positive outcomes for our local business community.
“Whilst the Chancellor made no direct reference to freeports, investment in infrastructure forms one of three pillars, alongside energy security and investment in technology.”
Peter Snaith, partner and head of Womble Bond Dickinson's Teesside practice and head of the national manufacturing sector team, added: "At a time when there are such limited funds to support investment, it makes good sense to focus on initiatives which deliver benefits in as many ways as possible. In terms of capital projects, it is also important to concentrate on projects which are close to fruition, wherever possible.
“Undoubtedly, many of the proposed investment zone sites, which may have been shelved today, could deliver significant benefits for businesses and local communities over time. However, by preserving, we hope, the government's focus on freeports, the Chancellor must choose to continue to back schemes which best support enterprise and encourage growth, whilst also delivering direct benefits in the form of jobs, access to training and regeneration projects for parts of the country which are amongst those that need it most. For example, the 'shovel ready' sites which sit at the heart of freeports like Teesside are of such an enormous scale that their positive effects will be enjoyed deep into the surrounding hinterland, which may now be denied access to the support that was proposed for wider enterprise zones.
“The Chancellor also preserved the UK's commitments to decarbonisation and some of our freeports are already providing the hotbed that can support the homegrown technologies for secure sources of renewable energy, and carbon capture and storage. In doing so, the government is backing 'clean power' initiatives, which are crucial for a sustainable modern economy, which the Labour party proclaim to be lacking in contrast to its Green Prosperity Plan.”
John McCabe, chief executive of the North East England Chamber of Commerce said: "We know the Chancellor has had difficult decisions to make with this budget. He was right to focus on stability and protecting the most vulnerable households and businesses. This is what our members have called for and the government appears to have listened.
"There are some important commitments on public spending, infrastructure and benefits rising in-line with inflation. The government’s business rate proposals support both the hospitality and retail sector and local councils – this is a good first step. But energy costs continue to be a key concern for our members.
"Now that the details of the government’s energy bill relief scheme have been published we will make sure we engage to get vital support for businesses in our region. Taken together these interventions may help the North East weather some of the biggest economic headwinds in 2023.
"The government’s renewed commitment to an extended devolution deal for the north of the region is also welcome. This could play a pivotal role in levelling up the North East. The right deal will be an important win for our region and we hope this is confirmed very soon.
Nicki Clark OBE, Chief Executive of Durham-based business support organisation UMI, said: “We know it will continue to be crucial for business to build resilience and manage costs. The trading crisis businesses are facing won’t go away overnight and we have many challenges ahead as set out in the Chancellor’s autumn statement.
"No one person or organisation can single handily fix the crisis but by working together we can make a big difference.”
Alex Hunter, CEO of renewable energy storage company Sherwood Power, based in Scorton, Richmond, told The Northern Echo “It’s encouraging to see the Chancellor talk about the need for energy independence in the Autumn Statement. While many consumers will no doubt be worried about the reduction in support with energy bills, a long-term solution is needed for the current energy crisis.
"This is why it’s encouraging to see the government is still committed to its investment in the Sizewell C nuclear plant. Regardless of whether you support the use of nuclear energy or not, energy security is one of the most pressing issues the UK is facing right now and this investment signified a long-term commitment to securing UK baseload generation.
“I also welcome any changes that allow the fast introduction of new emerging technologies in the UK, especially when it comes to renewable energy and related technology, like energy storage solutions. True energy independence will only be achieved if the government commits to investing in a hybrid solution that embeds flexibility and storage at the grid edge, so that power is available when and where users - industrial and consumers - need it.”
Mick Howard, CEO of Sunderland-based soft drinks manufacturer, Clearly Drinks told us “As an industry, we are heavily impacted by rising costs and inflation rates and while today’s announcement looks to address some of these concerns, there is definitely more to be done and more action needed as we face a recession.
“We are currently unable to plan ahead and budget for the coming year due to uncertainty over energy prices and inflation, which makes it almost impossible for us to forecast and predict what prices we should be giving to our customers to remain a profitable business.
"Today’s announcement does very little to provide clarity for businesses and I don’t feel we are yet in a position to feel confident for stability in the coming months, but we hope that this at least kick-starts further conversations on protecting and supporting UK businesses to allow us to grow.”
North East Development Manager at the Federation of Small Businesses (FSB), Reshma Begum, said: “Devolution has the ability to bring significant benefits to the region, accelerating growth and creating opportunities for businesses of all sizes across all sectors. The potential of new powers, resources and momentum will support SME’s which we know are central to thriving people and places. Our business community eagerly awaits the anticipated expansion to the North East Devolution Deal in the coming weeks.
“The announcement on refocussing the planned investment zones programme will undoubtedly be a disappointing blow for small businesses in the region. It is crucial for the government to recognise the extraordinary potential in the North East when making the decisions on the locations of the new ‘high potential clusters’.”
Stephen Hall, office senior partner at Deloitte in the North East, added: “The Chancellor’s package of benefits for business ratepayers was surprisingly generous, amounting to savings of £14 billion over the next five years.
“Hospitality, leisure and retail businesses will benefit from a further freeze of the current 50 per cent relief before it increases to 75 per cent with effect from 1 April 2023. The Chancellor also confirmed that the 2023 business rates revaluation will go ahead, with every commercial property due to have a new rateable value based on values as of 1 April 2021 next year. However, there will also be a new transitional relief scheme.”
David Borland, EY head of automotive in UK, said: “The Chancellor’s announcement that electric cars will no longer be exempt from vehicle excise duty from April 2025 could decelerate the UK’s journey to net zero.
“Along with the higher list price of EVs, the recent BIK increase, concerns on charging infrastructure all in the middle of a cost of living crisis, consumers may be reluctant to transition to a greener car fleet.
“On the positive side, there could be a short term demand increase in EVs prior to 2025, but whether manufacturers that are already struggling with order backlogs can fulfil any demand remains to be seen.”
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