Budget 2017: Regional business reaction. Support for our growth sectors, but where’s the vision?

November 22, 2017

Chancellor Philip Hammond’s support for the tech sector – a vital part of Swindon’s economy – in the Budget have been welcomed by regional business figures.

Institute of Directors South West chair Nick Sturge, pictured, said: “We need to build on the strong network of clusters that are already working well in the regions, accelerating growing businesses by helping them to access a broader talent and mentor pool, markets and investment. 

“Similarly, the Transforming Cities Fund seriously recognises the importance of local leadership, which we believe is key.”

Connectivity was also key, he said. “With a growing number of micro businesses operating from a home base, we wanted to see rural focused reincarnation of the connection vouchers scheme that made grants of up to £3,000 to help smaller business get superfast broadband installed.  

“This ended in 2015. Whether it will be reintroduced as part of the £500m tech investment announced today also remains to be seen, but it’s well overdue to be brought out of the long grass.”

The doubling of investment relief in Enterprise Investment Schemes (EIS) would benefit knowledge-intensive enterprises and, along with Seed Enterprise Investment Schemes (SEIS), had already allowed many small companies to progress significantly faster than they would have otherwise.

Accountancy group KPMG’s senior partner in the South West, Andrew Hodgson, pictured below, said the Budget had recognised the urgent need for improvements in regional infrastructure.

“Business leaders in the South West will welcome Mr Hammond’s promise of a £1.7bn Transforming Cities Fund to get the economy firing in the regions by boosting infrastructure.

“With clear evidence that our infrastructure if stifling productivity and growth, the power to transform the region now lies in the hands of the Metro Mayor.” 

This welcome news was further boosted by the investment in Welsh rail which would improve journey times between South Wales, Bristol and London, he said.

The Chancellor’s announcement that he is doubling the Enterprise Investment Scheme (EIS) allowance was also a positive step in helping early-stage businesses attract investment and raise finance.

“Not only will this help to boost investment in start-ups, but it potentially plugs a funding gap if the European Investment Fund is no longer available when the UK leaves the EU,” he said.

And while there were measures to improve competitiveness and innovation and a commitment to continue with a competitive corporate tax environment – things business crave – the sharp reduction in economic growth forecasts threatened to overshadow the, Mr Hodgson added.

At regional accountancy firm Bishop Fleming, which has which has seven offices spanning from the West Midlands to the South West, head of tax Andrew Browne, pictured, said the “embattled and isolated” Chancellor had been under pressure to be bold and imaginative in his first Budget since the General Election.

However, it was not the transformative event that was needed for the UK economy, he said.

“Philip Hammond has yet to demonstrate the required dynamism and vision to create a progressive tax regime that is powerful enough to energise a post-Brexit economy into an entrepreneurial powerhouse and raise the standard of living.

“Whilst he is donning his hard hat and opening the public purse to drive forward the much-needed housebuilding programme and development of the UK’s infrastructure, it is well short of being bold enough.

“The abolition of stamp duty for first time buyers on the first £300,000 of houses worth up to £500,000 is very welcome, but does not solve the fundamental issue of the affordability of a deposit and mortgage.

“And although the Chancellor recognises the need for greater UK productivity, tax-geared investment incentives still need a bigger boost, as will the funds needed to ensure we have adequate social care for our ageing population.”

He said while the Chancellor again softened the impact of business rate increases, the much-needed root-and-branch reform of this regressive and archaic tax was still some way off.

And he also slammed the Budget for failing to tackle what he said were the real issues facing small businesses, such as rates reform, tax complexity and red tape.

But Sam Holliday, the Federation of Small Businesses’ (FSB) Gloucestershire & West of England development manager, pictured, said the SME community had received a lot of ‘positive news’ from the Budget.  

“As with every Budget, the devil is always in the detail, but I think it’s fair to say there are clearly some positive news announcements here which will help the local small business community,” he said.

The FSB was delighted that the Chancellor had listened to it and others and not tampered with the VAT threshold – as had been strongly rumoured.

“We are also pleased that he has agreed to revisit the ‘staircase tax’, which would have unfairly penalised businesses operating over more than a single floor,” he said.

“The business rates news was also good. The more regular revaluations should stop the often surprisingly high hike that has hit businesses every five years, and we also welcome the decision that business rates will be linked to the Consumer Price Index (RPI) rather than the Retail Price Index (RPI), which should save our businesses money potentially.

“Elsewhere, we are pleased to see support for our local pubs and service industries with no increases on alcohol prices and, of course, all businesses will welcome the lifting of potential rises in fuel duty.

“With some encouraging news as well about an increased role for small builders as part of the new housing programme and large investments in infrastructure and skills this would seem, on the surface, to be a Budget which represents a real step forward for small businesses.”


Comments are closed.


Reach tens of thousands of senior business people across Swindon & Wiltshire for just £70 a month. Email info@swindon-business.net for more information.