North East LEP response to today’s Budget

Colin Bell, Business and Sector Growth Director at the North East Local Enterprise Partnership (North East LEP), responds to today’s Budget, delivered by the Chancellor of the Exchequer, Jeremy Hunt.

“Although the North East LEP welcomes the news that the UK is likely to avoid a technical recession, we also recognise that the pattern of low growth and low productivity will remain over the forecast period and that more needs to be done to stimulate the economy.

“We believe that continued and strengthened devolution is central to breaking this pattern and welcome the emphasis placed on devolution including the announcement of a third round of the Levelling Up Fund, the creation of a Levelling Up Partnership in South Tyneside and the intention to continue to extend devolved responsibilities, including the local retention of business rates.

“One of the greatest pressures on businesses is access to talent and skills and the introduction of ‘returneeships’ for those over 50, and the provision of 30 hours of free childcare for children over nine months old, will help provide businesses greater access to the skills that they are crying out for and support the transition of parents back to work after parental leave.

“We welcome the focus on growth, industrial strategy and a package of measures that will support the continued growth of the North East’s sectoral strengths in life science, tech and renewable energy, including the creation of, and £80million of investment into, a North East Investment Zone.

“And although the continued access to R&D tax credits for research-intensive businesses, where research and development-related activities account for 40% or more of expenditure, is welcome – particularly for businesses in sectors such as life sciences – we need to ensure that this doesn’t disincentivise innovation across the wider business community. 

“The signalling that inflationary pressures have eased and are forecast to drop, alongside the introduction of full capital expensing and investment allowance increases to £1million for SMEs, should help in bringing forward investment decisions that have been on hold. The lack of further measures to support businesses to offset the cost of energy may however continue to suppress investment, particularly in advanced manufacturing where targeted measures were less evident.

“And finally, in the North East, the mentioned transition of Local Enterprise Partnership functions is already underway under the region’s devolution deal and we look forward to working with stakeholders across the region to transfer the LEP’s functions into the new North East Mayoral Combined Authority and to represent and strengthen the North East’s business voice locally and nationally.”