Alexandra Graham
The most recent Budget had lots of good news for County Durham, and several of the measures announced look to be promising for growth in the North East.
The current increase on Small Business Rate Relief should see businesses in the county, both new and established, thrive. At present, business rates apply to all premises with a rateable value of £6,000 or more. From April, this will be doubled to £12,000 (1). This means that approximately 600,000 small businesses across the country that occupy a small shop or office will pay no rates on those premises.
County Durham already has a regeneration programme in place to encourage new business start-ups (2), and this measure could be the encouragement that many would-be entrepreneurs need. Indeed, the Budget has attempted to give incentives to businesses throughout their lives: after a new business grows, employs more people, and needs to expand, another measure announced in the budget may help. Changes in the rate of Stamp Duty means that businesses that buy premises valued at up to £1.05 million will pay less tax. The Corporation Tax rate is also being cut to 17% and this will benefit an estimated 1 million businesses. The changes are expected to help the North East continue growing in the years to come (3).
The Budget’s promise of tax support valued at £1 billion pounds for the oil and gas industries is also important to County Durham. The offshore energy sector is a major employer in the region and a number of smaller businesses exist to serve it. Furthermore, a thriving oil and gas industry could galvanise the development of the Durham Tees Valley airport which serves as a gateway to offshore workers travelling to Aberdeen (4). This brings us to the question of transport.
Businesses cannot, of course, exist in isolation, and need efficient and effective transport links to get their products and services into the wider community. In the budget, Osborne unveiled plans to improve the transport links that connect County Durham with the North West with a firm commitment to an upgrade for the A66 and A69 by 2017, as part of a £230 million package (5). Improving these transport links should help to develop business opportunities in the area.
The Chairman of Policy North, Steven Purvis, commented that ‘our roads are crucial connections for businesses in the North East and improving our infrastructure is key to the region’ (6). But it isn’t just roads that will see a change; the continued improvement in the railway system termed the Northern Programme will see faster connections between the North East and the rest of the Northern Powerhouse, thanks to the HS3 link. The HS3 link will have significant benefits to the North as a whole and should see increased tourism whilst simultaneously giving the workforce in the region a greater fluidity of movement (7).
Many of the measures from the Budget help the businesses of today, but what about the entrepreneurs of the future? The budget contained proposals that should help the County’s schools. Purvis states; ‘these are hugely important issues to the North East and one that is at the forefront of Policy North’s agenda. The Chancellor announced that all schools will become academies by 2020, with extra funding to be provided to do this, alongside a review of the schools funding formula which could have a big impact on places like Northumberland and Durham which currently lose out’ (8). The Academy plan is designed to reduce the gap between schools in London and the North, and improve opportunity in the area with plans to invest £20 million per year into the ‘Northern Powerhouse Schools Strategy’ (9). SCHOOLS North East claims that this measure could potentially bring an additional £45 million to the North East (10).
On a lighter note, beer lovers everywhere celebrated the freeze in alcohol duty (9), and none more so than the owners and customers of the many small, independent breweries that are springing up in the County Durham area. These micro-breweries are producing real ales for the discerning drinker and a real boost to the local economy! (11)
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References
- http://startups.co.uk/budget-2016-the-key-measures-small-business-owners-need-to-know/
- http://www.durham.gov.uk/media/1090/Regeneration-and-Economic-Development-servic
- http://www.bbc.co.uk/news/uk-politics-35819797
- http://www.thenorthernecho.co.uk/business/news/10838723.OilandgasmarketcouldcreatehundredsofNorthEastjobs/
- http://www.itv.com/news/tyne-tees/update/2016-03-16/policy-north-budget-had-some-important-content-for-the-region/
- http://www.northumberlandgazette.co.uk/news/local-news/budget-reaction-from-the-north-east-1-7800250
- http://www.telegraph.co.uk/finance/11488995/The-HS3-effect-What-high-speed-rail-in-the-North-could-do-for-your-city.html
8. http://www.northumberlandgazette.co.uk/news/local-news/budget-reaction-from-the-north-east-1-7800250#ixzz43YEshgT2
9. http://www.itv.com/news/tyne-tees/story/2016-03-16/the-budget-how-the-north-east-is-affected - 10.http://www.itv.com/news/tyne-tees/2016-03-16/budget-brings-fundamental-changes-to-schooling-in-north-east/
11. http://www.livingnorth.com/northeast/food-drink/somethings-brewing
