Commenting on Chancellor George Osborne’s first Budget on a Conservative mandate, Chris Hobson, Director of Policy and External Affairs at East Midlands Chamber (Derbyshire, Nottinghamshire, Leicestershire), said: “Before the Budget, the Chamber called on the Chancellor to deliver a package of measures focused more on boosting growth than austerity and what was announced today will, by and large, provide stimulus for the economy while continuing the tough task of eliminating the deficit at a steady pace.
“However, given that the Chancellor was in Derby only last month to state his ambition to make the Midlands an ‘Engine of Growth’ for the UK, it was disappointing that he didn’t say anything specific about fuelling that engine. There was a lack of any real action on infrastructure spending – which plays a critical role in generating growth – beyond the proposed road improvement fund, to be paid for by ring-fenced Vehicle Excise Duty.
“While it wasn’t explicitly mentioned, we await further details about two infrastructure initiatives mentioned in the written Budget which will have a real impact here in the East Midlands – the commitment of £5m of additional funding for Midlands Connect, to help develop its vision and strategy for transforming transport connectivity across the region in order to drive economic growth, and the allocation of the extended New Stations Fund to support a local bid for stations on the Robin Hood Line to Edwinstowe and Ollerton, subject to a business case, linking Nottingham city to the north of the county.
“There were, however, several measures announced that will be welcomed by business. Firms across the East Midlands are reliant on the roads for the movement of their goods and people, so a further freeze in Fuel Duty is a good thing.
“The Chamber has long campaigned for more clarity and certainty around Annual Investment Allowances and although we knew it was going to fall from its current level of £500,000, to just £25,000 from 1 January 2016, it was pleasing to see it will now be set at a new long term level of £200,000-a-year. This will provide a significant incentive for businesses to invest in their future and hopefully go some way to addressing the productivity puzzle.
“Reductions to the headline rate of Corporation Tax to 19% in 2017 and 18% by 2020 will be welcomed by business, as will the increase of the NIC employment allowance from £1,500 to £3,000. This could help to offset the expected increases to the National Minimum Wage, as recommended by the Low Pay Commission, which may well have a disproportionate effect on smaller employers already facing financial pressures as they implement pensions auto-enrolment.
“While there is still more specific detail to come, the commitment to set time scales for many of the measures set out in today’s Budget will offer the certainty to support businesses with their planning processes as they look to invest, recruit and grow.”
