South West business leaders have described the region being unrepresented on a list of new ‘investment zones’ announced in the Budget as “disappointing” and “a blow”.
Chancellor Jeremy Hunt has delivered the Government’s latest plans for the economy. Among the major announcements was the news that the UK would not enter a technical recession this year, according to the Office for Budget Responsibility (OBR) forecast. The OBR said inflation would fall to 2.9% by the end of this year, down from 10.7% last year
During his speech, the Chancellor listed 12 locations across the UK which the government had identified as new “potential Canary Wharfs”. These areas will receive £80m each over five years, including “generous tax incentives”. The funding can be used to improve skills, provide specialist business support, improve the planning system or for local infrastructure.
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Eight places in England have been shortlisted to host the zones, with none located in the South West, with Devon and Plymouth Chamber tweeting during the announcement there was “no mention” of the region.
The Chancellor has announced 12 new investment zones which will offer government funding and favourable business rates to stimulate growth in economically challenged areas. No mention of the South West. @westcottsUK #budget #budget2023 #springbudget #springbudget2023
— Devon & Plymouth Chamber (@Chamber_Devon)
The Great South West Partnership, a Government-backed partnership aiming to position the region as the UK’s green economic ‘powerhouse’, said the snub showed the area was “well down” on the government’s priority list.
Interim chair Karl Tucker said: “Although Torbay and Torridge are amongst areas in line for levelling up partnership funding, in the main the much discussed ‘levelling up’ agenda would appear to have been again restricted to investments in the North of England and the Midlands despite best efforts to expand this into other areas of the country much in need of levelling up.”
Ian Mean, Gloucestershire director at Bristol-based chamber of Commerce Business West, said the “well delivered” Budget had tried to tackle “the big issue” of growth and productivity. Mr Mean said it would give “a much needed boost” to companies struggling with recruitment, in particular child care support measures designed to encourage more parents back into the workforce.
He added that the competition announced for the small to medium sized nuclear reactors being developed by Rolls-Royce was “potentially really good news” for Gloucestershire. Two former decommissioned nuclear sites at Berkeley and Oldbury are among the sites being considered by the firm for these mini plants.
Mr Mean said a rise in corporation tax from 19% to 25% “would not be generally welcomed” by South West firms, adding: “Nor will the fact that the South West region have not got any of the 12 new investment zones announced by the Chancellor—most going to what are generally perceived to be “Red Wall” seats in the North.”
Martin Bysh, chief executive and co-founder of Bristol-based e-commerce fulfilment firm Huboo, said the Government’s latest attempt to stimulate regional growth felt “worryingly out-of-keeping” in and increasingly digitised economy.
Mr Bysh said: “Government assistance for growing businesses should be aimed at the entrepreneurs best able to take advantage of it, regardless of location. Creating investment zones is an arbitrary approach that will inevitably fail to support 1,000s of British entrepreneurs who are building high-potential businesses from their kitchen tables.
“These businesses exist all over the country and need to be supported and encouraged to keep growing, regardless of whether they’re near an investment zone.”
Dorset Chamber chief executive Ian Girling said the Chancellor had clearly made economic stability his “to priority” for this Budget, and welcomed measures to put more money in the pockets of consumers, including continued support for household energy bills and a freeze on fuel duty.
He added: “It is a blow that Dorset and the surrounding regions have missed out on the new Enterprise Zones so it will also be important that we as a county lobby hard to win as much of the newly announced £200m funding for local regeneration projects as possible. The launch of new skills bootcamps and ‘Returnships’ for over 50s could prove to be fruitful although more detail will be required on how this will work. There was little in the announcement that will provide comfort to firms most hard-pressed by large energy bills or the continued burden of business rates.”
Rob Case, tax partner at Cheltenham-based business advisory specialist Randall & Payne, said while there were some “sensible initiatives” announced by the Chancellor, the firm’s clients would need more detail to understand how they could impact on them.
He said: “With the exception of some of the specific announcements in respect of the extension to childcare funding and encouraging more people of working age back into work, this appeared at first glance to be a budget of macro-economic incentives, encouraging investment into all parts of the UK, businesses to base themselves here and further progress towards green energy.”
Accountancy firm Albert Goodman said while many of the new measures were welcome, they may not be enough or come soon enough to have “a major impact” on the economy in the short term. Meanwhile, Tracey Watts, a tax partner at the Somerset-headquartered firm said it was “disappointing” not to see any region south of Birmingham named among the 12 investment zones.
“So often the South West seems to be the region overlooked by both of the major political parties. Having nuclear power classed as being environmentally sustainable and thus eligible for the same support as other renewable sources will no doubt be a boon for Hinkley [Point C] and the surrounding economy. Carbon capture storage support could be a benefit for the rural sector who already provide a great deal of environmental stewardship.
“To end on a positive note, it was good to see draught ale relief for pubs to help our wonderful local pubs of which we have many to compete with the supermarkets.”
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