Square One Law host budget dinner with David Smith, Economics Editor of The Sunday Times as guest speaker
“Better than expected.” That was the view of David Smith, economics editor of The Sunday Times on George Osborne’s fourth budget to an audience of local businessmen and women invited by Square One Law and HSBC. It was a coup to get such an influential speaker to the event and there was much interest to hear him deliver his verdict.
Expectations may have been set low and certainly this year’s budget didn’t contain any measures which resulted in immediate uproar from certain business sectors– such as the pasty tax or VAT on caravans, but did it contain any positive measures for business in general and the North East region in particular?
Well, working within his self imposed constraint of fiscal neutrality, initial indications are that this budget should be given a cautious welcome. The new Employment Allowance will reduce National Insurance bills of every employer by £2,000, benefitting 25,000 employers in this region. Corporation tax rates will be unified from April 2015 and reduced by 1% to 20%. This results in the UK tax system being one of the most competitive in the G20.
Several housing initiatives were announced in an attempt to stimulate new development. Whilst the detail of these schemes are now causing inevitable political debate, any such initiatives should be welcomed by local house builders and the initial view of the market was reflected in an immediate rise in the share price of listed house builders.
The scrapping of September’s planned 3p per litre fuel duty rise will benefit a significant number of businesses in this region. Many may consider the £15bn pledged for additional infrastructure expenditure as too little too late but at least it is a move in the right direction.
Perhaps the most interesting thing for this region is the adoption of Michael Heseltine’s plan to pass control of billions of pounds of central government and European growth funding to local decision makers. The concern is whether we have the infrastructure required to successful fight our corner but given the undoubted talent sitting within the North Eastern LEP we should expect this region to win more than its fair share of such investment.