Chamber reaction to chancellor’s autumn budget

Written by

John McCabe, chief executive, North East England Chamber of Commerce:

We know the Chancellor has had difficult decisions to make with this budget. He was right to focus on stability and protecting the most vulnerable households and businesses. This is what our members have called for and the government appears to have listened.

There are some important commitments on public spending, infrastructure and benefits rising in-line with inflation. The government’s business rate proposals support both the hospitality and retail sector and local councils – this is a good first step. But energy costs continue to be a key concern for our members. Now that the details of the government’s energy bill relief scheme have been published we will make sure we engage to get vital support for businesses in our region. Taken together these interventions may help the North East weather some of the biggest economic headwinds in 2023.

The government’s renewed commitment to an extended devolution deal for the north of the region is also welcome. This could play a pivotal role in levelling up the North East. The right deal will be an important win for our region and we hope this is confirmed very soon.

However, as the OBR forecasts confirm Britain is now in or nearing recession, it’s vital the government continues to work with us to stimulate business growth and international trade, ensure we’re meeting future skills demand and help build a more open and inclusive economy. These are the Chamber’s priorities and we will continue to make this case on behalf of our members across the North East.

Chamber reaction to Chancellor’s fiscal statement

Written by

Commenting on the Chancellor’s Fiscal Statement, John McCabe, Chief Executive of the North East England Chamber of Commerce said:

“On behalf of our members right across the North East we are pleased to see Government act quickly to address a number of pressing economic challenges.

“The big-ticket items around Investment Zones, planning and infrastructure all have real opportunity to accelerate growth across the region. But we’ll need to see the freedoms and flexibilities proposed backed-up with investment and a continued commitment to genuine local autonomy. This is particularly important in the North East: further devolution in the North of the region will be a key tool in helping Government achieve its goals. We’ll also be working with our members to make sure any unintended consequences of these changes, such as the displacing of talent or investment, are designed out of the process so that they can work for the whole of the North East.

“The Government now has a challenging task ahead of it: to achieve its tax cutting agenda whilst sustaining public investment which we know is at the heart of productive and thriving places. The Government’s plan is one part of the solution. But in a week where we’ve seen the North East top the league for the highest rates of child poverty nationally we look forward to working with the Chancellor on skills, inclusion and the wider Levelling Up agenda.

“It’s good to have a plan. What we need now is a strategy – a comprehensive, long-term and clear policy agenda for growth to give businesses and people in the North East confidence in our shared future.”

Chamber sets out key demands for Chancellor

Written by

Ahead of the Chancellor’s Spring Statement on Wednesday, 23 March, North East England Chamber of Commerce has set out what announcements it wants to see to support the region’s business community.

John McCabe chief executive, North East England Chamber of Commerce said: “Many businesses are still recovering from the economic shock of the pandemic and now they’re facing sharply increasing energy prices, raw materials costs and other inflationary pressures. This all adds up to a very sudden and very significant cost of doing business crisis.

“We hope the Chancellor will acknowledge this in his statement and will take whatever steps are necessary to ease the current pressures facing business. That’s how we’ll protect jobs and stimulate growth.

“The economic recovery from Covid is long, slow and fragile and it will be placed at great risk unless the Chancellor listens to business during yet another period of uncertainty.”

The Chamber policy team will be analysing the Spring Statement and issuing a response to what it contains.

We need to see Government invest in green skills

Written by

Marianne O Sullivan, Chamber policy adviser, latest column for The Journal.

The Budget had some welcome announcements for North East although we’re still waiting for the Government to publish its plans on key areas like levelling up.

Part of the good news for the region was the investment confirmed to improve local rail links in Teesside including redevelopment schemes for Darlington and Middlesbrough stations.

There was also a reduction in business rates for those in the hospitality, arts and culture sectors who have been negatively impacted by Covid restrictions.

We welcome the investment in skills including the newly announced Multiply scheme, which will equip adults with basic numeracy skills. The £560 million investment in the Multiply scheme will benefit our region in particular due to the region’s lower-than-average numeracy levels.  

However, the wait goes on for the Levelling up White Paper and the Government’s integrated rail plan to set out a longer-term strategy for region. Investment in major projects such as Northern Powerhouse Rail and a clear definition and metrics for the Government’s levelling up agenda will be crucial to success.

Despite COP26 being held in Glasgow the Budget didn’t have many major announcements around climate change. Some funding was announced to grow the heat pump market along with business rates relief for businesses to decarbonise non-domestic buildings and an increase in public research and development investment.

We need to see Government invest in green skills to ensure people in the region are able to take advantage of opportunities in jobs in key sectors such as retrofitting, renewable energy and battery technology. We also need to ensure that opportunities are accessible to a large proportion of those at risk of unemployment. This is particularly important for the North East, due to a significant proportion of our workforce holding lower level qualifications.

COP26 presents an opportunity for firms to re-examine their sustainability strategies and their wider supply chains. This could the North East to lead the way in a green recovery making businesses more competitive and attractive to customers with climate change an increasing priority for consumers and the Government. 

The Chamber will be sharing best practise with members as well as campaigning for investment to build on the North East’s green infrastructure to meet our net zero targets, as well as creating new jobs and allowing the region to contribute to the UK’s economic recovery.  

Autumn Budget 2021 briefing

Written by

The Chancellor delivered his Budget and Spending Review today, which included some announcements for the North East as part of spending on transport in city regions, from the Levelling Up Fund, the Community Ownership Fund, and an investment from the UK Infrastructure Bank in Teesside. 

The Treasury has summarised these announcements in a set of regional fact sheets here. 

Our initial comment from our policy director Jonathan Walker is here: “The Budget had some welcome announcements for North East businesses but our wait for a long-term levelling up strategy goes on.” 

But how did Rishi Sunak’s announcements compare to the priorities we outlined for the region in our submission to him last month? 

We said that this Budget and Spending Review must… 

  • provide a clear, bold definition of levelling up 
  • fund departments and public bodies in a way that makes them responsible and accountable for levelling up  
  • advance the cause of decentralisation and devolution 

There were a number of announcements in the Budget either made from the Levelling Up Fund or under the wider auspices of ‘levelling up’. These include regeneration projects in Newcastle, Sunderland and Teesside. However, the long-awaited White Paper on levelling up is yet to be published, while other related strategies such as the Integrated Rail Plan have also been much delayed. 

The projects announced today are all extremely welcome and will make a difference to their local communities. However, the fact that they are being awarded from a central funding pot after a national competition speaks to the centralised nature of the country. Without a greater commitment to long-term devolved funding settlements we are unlikely to see much progress in levelling up. 

  • provide support for exporters 

There was a £67.6 million budget increase for the Department for International Trade (DIT) over the Parliament to maintain capacity to secure trade agreements and support exporters.  

An announcement of £180 million to build a UK ‘Single Trade Window’ which aims to reduce the cost of trade by streamlining trader interactions with border agencies.  

Funding for EU-focused Export Support Service from DIT as part of Export Strategy to be published shortly. 

£838 million over three years to 2024-25 to complete delivery of Customs Declaration Service (CDS).  

£107 million next year for the Trader Support Service (TSS) which helps traders move goods to Northern Ireland.  

  • establish the UK Shared Prosperity Fund based on regional economic need 

The first announcement was made from the Shared Prosperity Fund, which will distribute £2.6bn over the next three years, including through the £560m ‘Multiply’ scheme which is aimed at adult numeracy. The Treasury suggests regions such as the North East, where adult numeracy levels are lower, will benefit most from this. 

The schemes so far are national in focus, and don’t reflect the structure of EU funds, which were distributed direct to regions based on need. 

  • deliver on aspirations for broadband investment 

The Government in the Budget confirmed its target to invest £5 billion in to support the rollout of gigabit capable broadband in across the whole of the UK.  

The Government will also provide £180 million over the next three years as part of its £500 million investment in the Shared Rural Network, to deliver 4G mobile coverage to 95% of the UK 

There weren’t any particularly new announcements around broadband but we welcome the Government committing to targets to improve digital connectivity. We now need to see this investment take place to improve connectivity for the region.  

  • properly fund rail investment across the North, including the eastern leg of HS2 

There has been welcome investment confirmed in the Budget for improving local rail links in Teesside including redevelopment schemes for Darlington and Middlesbrough stations. We are still waiting for the Government’s integrated rail plan to set out plans for investment around HS2 and Northern Powerhouse Rail.  

  • ensure the long-term success of regional airports 

We welcome the Government extending the Airport and Ground Operations Support Scheme (AGOSS) for a further six months to help airports as they recover from Covid travel restrictions. 

The Budget also announced a 50% cut in domestic APD and a new ultra-long-haul distance band.  

  • incentivise investment in low-carbon housing and retrofitting 

The Government set out plans to invest £450 million in growing the heat pump market and reduce costs by 25-30% by 2025 to allow the technology to be rolled out across the UK.  

The Government is also providing business rates exemptions and relief in England to support the decarbonisation of non-domestic buildings.  

  • support arts and culture as a means of regenerating communities 

The arts and culture sector will benefit from 50% business rates relief for retail, hospitality and leisure sector businesses, as well as specific Covid recover funding of £52m next year. There is also tax relief for museums, galleries, theatres, orchestras and film and TV projects. 

  • properly fund and support our further and higher education sectors 

Adult skills 

Skills funding will increase by £3.8 billion compared to 2019/20. This funding will quadruple places at skills bootcamps, expand the Level 3 qualifications on offer to adults and fund the newly announced Multiply scheme, which will equip adults with basic numeracy skills. The £560 million investment in the Multiply scheme will benefit the North East disproportionately due to the region’s lower-than-average numeracy levels.  

Schools and colleges 

The Budget outlined a £1.6 billion increase to 16-19 education funding over three years which will help maintain funding rates and expand the rollout of T Levels. Rishi Sunak also outlined a £4.7 billion boost for schools budgets by 2024-2025, amounting to a cash increase per-child of £1500. Also announced was £2.6 billion of funding to be spent on creating new school places for children with special needs and disabilities. Whilst these investments are a step in the right direction, it is unlikely they will counter the record cuts which schools and colleges have faced since 2010.  

The Chancellor also announced additional funding for the schools recovery fund of £1.8 billion, aimed at supporting schools. The total investment of £ 5 billion is still much lower than the £15 billion Sir Kevan Collins, the Government’s former catch up advisor, argued was necessary to support young people to catch up on lost learning.  

Universities 

The Government’s increase in public investment in Research and Development (R&D) to £20 billion will provide a funding increase for the UK’s universities and research institutions of £1.1 billion per year more by 2024-25 compared to 2021-22.  

  • increase funding flexibility to encourage employer investment in training 

There were no significant announcements which would enable this additional flexibility. We considered this an important change to make to enable businesses to engage with a broader range of spending under Apprenticeship Levy rules and adjust how the scheme worked to fit the needs of modern employers. 

  • recognise the damaging economic impact of welfare cuts in our region 

The Budget announced a reduction in the taper rate that applies in Universal Credit from 63% to 55% by 1 December 2021. This is welcome as it will help people working on Universal Credit and keep more money within the region, however those not in work will not feel the benefit.  

  • put in place the necessary business support measures to reduce the impact of future Covid restrictions, including a limited reintroduction of the Job Retention Scheme 

The Government announced business rates relief of 50% for retail, hospitality and leisure sectors in 2022-23. Eligible properties will receive 50% relief, up to a £110,000 per business cap.  

This is positive for businesses in these sectors, however other sectors won’t benefit.  

There was no mention of wider Covid business support packages, or how these might be reintroduced should restrictions return. 

Useful Link

The full Budget document are available here.

Photo by Marcin Nowak on Unsplash

‘Budget good in parts but lacks detail on long term strategy’

Written by

Jonathan Walker, policy director, North East England Chamber of Commerce said: “The Budget had some welcome announcements for North East businesses but our wait for a long-term levelling up strategy goes on. 

“In the near term we were pleased to see Government had listened to our campaigning on the need for support for the hospitality, arts and culture sectors as well as our regional airports which were so badly hit by the pandemic. 

“We welcome the confirmation of funding for a number of regeneration and transport projects across the region. 

“Similarly, many of our members will benefit from the measures announced today on business rates although they fall short on the substantial reform that is needed. 

“However, substantial longer-term strategies like the Levelling Up White Paper, the integrated rail plan and details on how the Shared Prosperity Fund will work, have yet to see the light of day. Without these plans it is difficult to judge how much of a long term impact the levelling up agenda will have on our economy.  

“We would like to have seen further support for exporters as international trade is so crucial to our economy.” 

Budget 2021 – what we know so far

Written by

Ahead of the Budget on Wednesday we’ve seen some suggestions in the press on what to expect. 

We made some clear asks, summarised below. 

Based on this weekend’s speculation, we seem no clearer on a definition of levelling up, on the future of the Shared Prosperity Fund and how it will replace EU funding, or on how business support packages could be reintroduced through the winter if Covid cases continue to rise. 

However, there have been some clear proposals on a number of the other points we raised in a letter to the Chancellor last month. 

One of the main expected changes will be an increase to the national living wage from £8.91 to £9.50 from the 1st of April next year. The apprentice rate and the national minimum wages for younger workers under 23 are also expected to be see and increase on Wednesday. 

We’re also expected to see a focus on investment in skills with a £1.6 billion increase in 16-19 education funding, an expansion of T-levels, and a £170 million increase to the apprenticeship budget as well as a more funding for skills bootcamps and to expand the level 3 adult offer. 

In terms of transport there’s an expectation that on Wednesday there will be an announcement of funding for train, bus and cycle projects in particular we’re expecting funding to be allocated to the Tees Valley for the upgrades for Darlington and Middlesbrough stations and improved rail connections. 

But until we see the detail, we won’t know how much of the commitment for the Tees Valley has been announced previously. 

There’s also speculation that the Eastern Leg of HS2 – the section that would travel from Birmingham through Yorkshire and on the North East – could be scaled back. This would be disappointing with existing capacity on the East Coast Mainline is so limited, and when connectivity from our region to other parts of the North and the Midlands remains poor. 

We’re still waiting to see about other major transport announcements like Northern Powerhouse Rail. 

We’ve also seen some reports of £500 million in funding allocated to create ‘family hubs’ which will give support and advice, the £500 million will also include funding allocated to mental health support services. 

Elsewhere, £1.8bn is expected to be allocated for building 160,000 new homes on brownfield sites across the country, along with money for digitising the planning system. It’s uncertain at this stage how this money will be allocated across the country. 

There’s also funding expected to promote electric vehicle production in the North East and the midlands, and some funding for regional museums. 

We’ll wait to see the full details announced on Wednesday but the focus on skills is positive along with the funding for Darlington and Middlesbrough stations. 

The Chamber team will be analysing the Budget tomorrow lunchtime – and we’ll be particularly looking for progress on levelling up, decentralisation, export support, regeneration and Covid support. All of which were missing from this weekend’s leaks. 

In the meantime, the Chamber’s full Budget submission is available here: https://www.neechamber.co.uk/wp-content/uploads/2021/10/Chamber-Budget-Letter-to-Chancellor-Sep-21.pdf 

Photo by Marcin Nowak on Unsplash

CHAMBER DEMANDS A REAL LEVELLING UP BUDGET

Written by

North East England Chamber of Commerce has written to the Chancellor ahead of the Budget on 27 October urging him to help level up the North East following the enormous impact of the pandemic.

In the letter, John McCabe, Chamber chief executive, set out in stark terms how the pandemic dealt an enormous and disproportionate blow to the North East compared to the rest of the UK.

He said: “Covid has not been blind to economic circumstances.  Its effects have been most profound where deprivation is the highest. The human cost of the pandemic has been appalling, yet there is also a tremendous economic cost, acerbating the regional disparities that have given rise to the unequal impact of the virus. Levelling up was of huge importance prior to the pandemic. It is now critical.

“Our businesses have performed admirably throughout the pandemic and are now beginning to see encouraging signs of recovery. They want this recovery to be sustainable, fair, and long- lasting.”

Recommendations for Government action from the Chamber cover a range of issues including the need for a clear definition of levelling up and more devolved powers.

It emphasised the importance of essential rail investment, the establishment of the long-awaited UK Shared Prosperity Fund based on regional economic need and incentivisation of investment in low-carbon housing and retrofitting.

The Chamber also stressed the combination of factors that have been so challenging to North East businesses.

In addition to the pandemic, the North East was particularly exposed to the consequences of Brexit. Many businesses saw an almost overnight fall in their European sales and have been struggling to adapt to rules, costs and subdued demand. This has undoubtedly compounded the challenges they have faced in recent months.

As well as this the letter said there were continued problems created by disruption to global supply chains and staff shortages.

The letter also highlighted the need to properly fund and support the region’s further and higher education sector and to increase funding flexibility to encourage employer investment in training.

John McCabe said: “Levelling up is a long-term project that will not be resolved through one Budget. However, the decisions and investments the Government makes on 27 October will be judged by how effective they are in moving the country towards a fairer, more balanced economy.”

The letter also extended an invitation for the Chancellor and his team to meet the Chamber and hear at first-hand its members’ views.

To access the letter click here

Chamber-Budget-Letter-to-Chancellor-Sep-21Download

Chamber’s Budget Briefing

Written by

​This lunchtime, Chancellor Rishi Sunak delivered his Budget, which included an extension of the main coronavirus business support packages, and significant investment for the region in the form of a new governmental economic campus in Darlington and a freeport for Teesside.

The Chamber’s policy and knowledge team has created this briefing document which summarises the key asks we made of the Treasury ahead of the Budget, the main announcements from today, and offers our commentary on the impacts for the region and its businesses.
If you have any feedback or queries relating to the Budget, please feel free to contact the policy team on [email protected].

Download the Chamber’s Budget Briefing here

Chamber broadly welcomes Chancellor’s budget

Written by

Jonathan Walker, director of policy, North East England Chamber of Commerce said:

“We’re really pleased that the Chancellor supported many of our biggest business priorities today. We had campaigned hard for more business support measures and for the relocation of Treasury jobs to our region. Government has listened with the announcement of a business rates holiday, an extension of the furlough scheme and support for specific sectors like hospitality, as well as the great news about the new economic campus in Darlington.

“It is also really positive that our region will have a freeport. We now look forward to seeing the detail on how it will be delivered to add genuine economic value.

“However, other parts of the North East will be feeling like they missed out on investment and we urge Government to reconsider the value and opportunities of a second Freeport and other major projects in the north of our region.

“There is good news today, make no mistake, but the journey to recovery and genuinely closing the economic gaps in our country is only just beginning.”