Economy at heart of election battleground

AS the dust begun to settle on George Osborne’s budget, regional business leaders have broadly welcomed both his performance yesterday, and his stewardship of the economy.

With a General Election looming, the 2015 budget was always going to be a highly political affair, as Osborne reminded the electorate throughout his speech of Labour’s economic failings in the last government.

There were limited giveaways and more good news for Greater Manchester and Cheshire East Council – which have close ties to Osborne – as they became the first local areas to be handed powers to control 100% of future business rate growth.

There was little to cheer in Liverpool though, as Mayor Joe Anderson bemoaned that not one of his five pre-budget wishes – varying from more funding to an extension of High Speed 2 to the city – were granted.

Carl Williams, managing partner of business advisors Grant Thornton in the North West,  gave his assesment, stating: “With less than two weeks to go before Parliament is dissolved and less than two months before the public pass their judgement at the ballot box, this budget fired the starting gun on what will be the most difficult to predict general election in a generation.”
 
“We welcome the planned business rates review and hope that it will be radical, considering how business rates can better reflect the modern economy – not necessarily based on property values – as well as incentivising cities and local authorities to support and not hinder business growth.

Williams added: “The Chancellor confirmed that the administration costs of central government had fallen by 40% during the lifetime of this parliament. Some pre-election coverage suggested the Chancellor may announce modifications to the depth of cuts planned during the next parliament.

“However, he stuck to the additional £30bn savings previously announced. Of this, £13bn will be met by government departments (with £12bn from welfare and £5bn from tax avoidance/evasion) but it remains unclear how much of this will be borne by local government.

“However, the key message today on public finances is that a surplus is forecast during 2019/20 and that public spending will then grow in line with growth in the economy. This offers a glimmer of light at the end of the tunnel for public services.

 “A final word of caution. Given the unpredictability of the outcome of May’s general election, it is likely that there will be an emergency budget following the formation of the next Government –  particularly if there is a new Chancellor in place –  which could see Wednesday’s Budget plans amended or overturned.”

Mayor Joe Anderson, a regular and vocal critic of the Conervatives’ auterity measures, said: “There was no mention of the crisis in funding social care, or about how we protect services like children’s centres. No more detail about the ‘Northern Powerhouse’. Nothing on HS2.  And no prospect of a fairer funding deal for Liverpool.

“In fact, there was no mention of local government at all. Zero out of five for addressing Liverpool’s needs.”

Christian Spence, head of research and business intelligence at Greater Manchester Chamber of Commerce, was less partisan in his view: “Overall, this was a confidently and competently delivered Budget. Business will, on the whole, be pleased to see the stability offered by the Chancellor’s speech with a firm commitment to return the national accounts to a stronger position and the avoidance of any overly grand political giveaways this close to a general election.

“Undoubtedly it was a Budget for voters rather than for business.”

He added: “The Northern Powerhouse was mentioned once again and the 100% retention of business rates growth in Greater Manchester is another important step in securing greater autonomy for the city regions of the UK.

“We had hoped for greater certainty of the delivery of HS3 and the wider One North proposals though we place firm hopes on the establishment of Transport in the North to be announced later this week and the move to a delivery plan for these schemes over the coming months.”