Member Article

North East Businesses React to Spring Budget Statement

Chancellor Jeremy Hunt announced a raft of measures in the Spring Budget designed to grow the economy – bolstered by forecasts from the Office for Budget Responsibility that the UK will not enter a technical recession in 2023 and that inflation will fall to 2.9% by the at the end of the year.

Announcements on investment tax relief and a focus on green energy and transforming the UK into a science and technology superpower were largely greeted with approval by businesses leaders in the North East of England.

Joanne Leng MBE, chief executive of NOF, the UK business development organisation for the energy sector, said: “Nuclear and Carbon Capture Usage and Storage (CCUS) are key elements of a balanced energy future, which will help drive the UK towards its net zero ambitions.

“The reclassification of nuclear, opening up access to tax incentives, and the innovation fund for Small Modular Reactors are significant development for the sector that can play a part in opening up opportunities for the UK supply chain.

“CCUS is a very innovative concept that will require the contribution of a dynamic supply chain, made up of companies with transferable and technology-driven capabilities, and this £20bn investment will accelerate activity in this area.

“NOF is working closely with operators and supply chain companies across all areas of the energy sector, including CCUS and nuclear, and we are confident that our members will be integral to the success of the challenge to deliver a low carbon economy.”

Jon Bolton, chairman of Teesside-based Materials Processing Institute, the national centre for research and innovation in the steel and metals sector, welcomed the chancellor’s emphasis on transforming the UK into a science and technology superpower, including £370m funding to boost growing technologies including supercomputing and artificial intelligence.

He said: “The Institute’s Digital Technologies Group is already a leader in key areas including data analysis, machine learning, and software engineering as part of the challenge to optimise industrial processes.

“That the chancellor recognises the importance of science in transforming the UK’s industrial and manufacturing base is encouraging and I also welcome his announcement on the creation of investment zones in the North East and Teesside, which will be clustered around universities and research centres.

“As well as conducting its own research, the Institute already works closely with Teesside University, and I look forward to contributing to innovative projects that can grow jobs and the local economy.”

Charlene Lyons, Chief Executive of Black Sheep Brewery, said: “Cutting duty on draught beer is a welcome measure from the chancellor and reaffirms the importance of pubs to the economy and their integral role in communities.

“We are hopeful, being almost three years to the day since we were sent into lockdown and our industry decimated, that the brewing and hospitality sector can start to rebuild some momentum.

“However, we look forward to finding out what the true benefit of the Brexit Pub Guarantee will be, especially considering that our industry is facing an overall tax increase rather than a reduction from August 1st.

“The crucial challenge for the chancellor is to unlock growth opportunities for all types of businesses in our industry and others, so they can be rewarded for the fortitude and true grit they showed during the pandemic and the many tough months since.

“The chancellor highlighted how our pubs are the most treasured community institution, and we appreciate his efforts to provide some relief, but a lack of immediate support in today’s budget will still put the future of many of them at risk.”

Tania Cooper MBE, Chair of the North East STEM Foundation, said: “If we are to be a “science superpower”, we must remember that a superpower derives its strength from the people who drive it. Beneath the chancellor’s four pillars of enterprise, employment, education, everywhere, there needs to be a foundation of STEM-based training at every level of the education system.

“There has never been a better time to invest in our region’s young people and these investment zones will be a catalyst for further growth in the area.

“This includes the need for University Technical Colleges (UTCs) to equip young people with industry relevant skills, which will be even more pertinent in the North East and Tees Valley if the new investment zones are to prosper.”

Fergus Laird, President of the Commercial Property Network (CPN) and Investment Partner at Newcastle-headquartered Naylors Gavin Black, one of the North East’s largest independent commercial property consultancies, said: “In the North East, we have a shortage of good quality warehousing, distribution centres and factories, and so it is very pleasing to see the chancellor announce a new investment zone for the region. It will only serve to attract investment and jobs.

“One of the biggest issues facing the commercial property sector is the laborious planning system and a lack of financial incentives for new developments. However, investment zones have the potential to unlock real levelling up by making it quicker and easier for developments to get relevant permissions, alongside providing significant financial incentives in terms of preferable access to funding, zero-rated business rates and enhanced structures and buildings allowance.

“I am at MIPIM and investment zones are a hot topic of conversation with investors. The big test of their effectiveness will be the speed at which development begins. They have been on the agenda for a while now and we need to see action sooner rather than later if the UK is to compete with other countries which are also doing their utmost to attract investment. It would be a huge shame to waste this opportunity.”

Aman Chahal, CEO of Stockton-on-Tees headquartered TaperedPlus, a national leader in the design and supply of flat roofing and insulation systems, said: “I certainly welcome the announcement on the successor to super deduction tax relief, albeit one that is less generous.

“Given super deduction was only ever a temporary measure, Jeremy Hunt has recognised the importance of investment by announcing that every pound spent in IT equipment, plant or machinery can immediately be deducted from profits.”

Responding to the announcement that Tees Valley will be one of eight investment zones focused on developing life sciences, advanced manufacturing, and green industries, Donna James, research director at Darlington-based STEM specialist recruitment firm Populus Select, said: “The North East, but particularly Tees Valley and Durham, is poised to make the most of the green industrial revolution thanks to our world-leading research universities, rich heritage of manufacturing, chemical and process industries, combined with many relevantly-skilled workers.

“The investment zones will attract investment and jobs that are much-needed in the North East, where we have one of the highest inactivity rates in the UK and need to provide well-paid, fulfilling work to tempt highly skilled workers out of retirement, – and also give opportunities for career progression, and opening up entry-level jobs to young people.”

This was posted in Bdaily's Members' News section by News Gathering .