Budget 2011: Yorkshire business community reacts

REGIONAL business leaders broadly welcomed yesterday’s Budget, but some are sceptical about whether the Chancellor’s measures went far enough.

George Osborne hailed his Budget as one for growth and pledged that it sent a clear message around the world that “Britain is open business”.

Richard Kendall, head of policy at Hull and Humber Chamber of Commerce, said: “The Chancellor’s rhetoric about wanting a Budget for growth was spot on, but businesses will judge him on his actions. 

“Business-friendly measures such as cutting corporation tax, reducing red tape and simplifying the planning system are very welcome and will help companies to grow.” 

However, he added: “The measures on fuel duty are a step in the right direction, but it will take more than a 1p/litre reduction to relieve the pressure being felt by businesses.

“The Chancellor’s decision not to maintain the extension to empty property rate relief will be felt hardest by businesses in the North. It will make building new property riskier and make it harder for small businesses to find premises. This is a backwards step when he wants to rebalance the economy.”

The Chancellor announced the creation of 21 Enterprise Zones. The Government has set out plans to create two in the Leeds and Sheffield city regions and the exact locations of those, and eight others, are expected to be announced later today.

Dale Robinson, associate at property firm GVA, said he welcomed their creation and the impact enterprise zones would have on reducing planning controls.

However, Mr Robinson said: “It will be important however, to ensure that these enterprise zones deliver real potential for growth and job creation and that they don’t suffer from the same criticisms as the 1980s schemes.

“A number of the former enterprise zones have been seen as failures as growth areas. Criticisms focus especially upon evidence which demonstrates that jobs and investment were largely shifted from other areas outside these zones, and the fact that their growth stalled immediately after the ‘zone’ status was removed and did not, therefore, contribute towards long-term sustainable economic growth.”

Sheffield Chamber of Commerce welcomed the announcement of an Enterprise Zone in the city region, saying it will offer a needed boost to a host of businesses.

Richard Wright, executive director of Sheffield Chamber, said: “The 2011 Budget provided some encouraging signs with a strong focus on providing more support to small businesses and entrepreneurs.

“We are therefore delighted that Sheffield has been chosen to receive an enterprise zone and we look forward to working with the Government and local authorities on the specific details to ensure businesses across the city region can benefit.”

Gary Williamson (left), chief executive of the Leeds, York and North Yorkshire Chamber, said: “The Government has remained on course in its deficit cutting programme with this fiscally neutral budget. The Chancellor’s second Budget was pro-business, pro-growth and pro-skills, but the downgrade of the economic growth forecast to 1.7% highlights the fact that we are not out of the woods yet.

“A number of business friendly policies were introduced, such as the 2% cut in corporation tax, the simplification of the tax system and the possibility of income tax and NIC merging.

“The Chamber also welcomes the Government’s support for young and new business through the creation of the body Start-Up Britain and the news that businesses with 10 employees or less and start-ups will be exempt from new domestic regulation over next three years.”

Georgina Mitchell (right), head of Yorkshire-based stockbroker Redmayne Bentley’s investment services, said that despite the Chancellor pledging to help families, UK personal finances remain squeezed as inflation remains high.

Ms Mitchell said: “Unless your income can keep pace with inflation, the value of your cash will diminish. If inflation ran at 5% for one year, £1,000 in one year’s time would be able to buy the same as £950 today. Protecting your savings and investments against inflation should be high on everyone’s priority list, but particularly those on a fixed income.”

Andrew Palmer (left), Yorkshire regional director for the CBI, said: “This Budget will help businesses grow and create jobs. The Chancellor has made clear the UK is open for business.

“The extra 1p cut in corporation tax will help firms increase investment. Meanwhile, significant changes to entrepreneurs’ taxation will rightly focus much-needed support on businesses with growth potential.”

Mr Palmer also applauded moves to boost the manufacturing sector.

He added: “Support for manufacturers through the Climate Change Agreements will help them manage energy costs, which is particularly important given that the government is pushing ahead with a carbon price floor.”

Nevil Hall, joint managing director at Brighouse-based Millers Oils, said: “There were many positives contained in the Budget but, with many of the measures announced by the Chancellor set to happen over the next few years, the effects will not be seen overnight.

“There was a lot of encouragement for entrepreneurial businesses and the doubling of Entrepreneur’s Relief to £10m and increase to R&D tax credit for SMES are both very welcome announcements. 

“Other incentives for businesses and entrepreneurs include the extension of the Enterprise Investment Scheme but I would like to see a simplification and relaxation of red tape in this area as this is currently an area fraught with traps.”

Leeds Bradford Airport (LBA) welcomed the Chancellor’s decided to freeze Air Passenger Duty (APD) at current rates for this year.

However, LBA is warning that passengers still face the prospect of ‘double taxation’ and further increases in flying taxes when aviation enters the EU Emissions Trading Scheme in 2012; and also that the Chancellor may raise APD next year.

John Parkin (right), the airport’s chief executive, said: “LBA cautiously welcomes the fact that Air Passenger Duty is not going up immediately, though would not support a delayed increase coming into effect next year. We now call on the Chancellor to emulate the decisions of European competitor nations to reduce or abolish APD in the UK.”

Commenting on Mr Osborne’s announcement that the Government is to make £250m of funding available to help first time buyers, Rosemary Edwards, partner and head of residential development at law firm Shulmans in Leeds, said: “Whilst the details of this scheme have yet to be confirmed, one would hope that the Government will follow the model previously used for HomeBuy Direct, so that they are not re-inventing the wheel and/or creating further cumbersome administrative systems which have to be gone through to make such funds available.

“This announcement will certainly be welcomed by the house building industry and will go some way towards encouraging development , which in turn will help fill some of the demand for new housing in the UK.”