Yorkshire Forward Welcomes Budget Priorities of Regional Investment and Support for the Nation’s SMEs

23/06/2010

Yorkshire Forward has responded to this week’s Emergency Budget and welcomed the call to strengthen regional capability with the launch of the Regional Growth Fund and further support for the growth of the nation’s Small and Medium sized Enterprises (SMEs).
 
The Chancellor outlined a package of measures aimed at ensuring future growth in SMEs, including a reduction to the small companies’ tax rate to 20 pence, and cutting Corporation Tax Rates of one per cent to 27 pence in the pound in 2011 with a reduction of 1% each year for a period of four years.
 
The budget also outlined measures to support new businesses through a holiday in National Insurance Contributions which will operate within selected regions -  including Yorkshire and Humber - in support of private sector growth.
 
Plans are yet to be agreed with business on a long term approach to the taxation of foreign profits, the treatment of intellectual property and the proposals on research and development.
 
Yorkshire Forward welcomed measures to support businesses in gaining much needed access to finance with an extension of the Enterprise Finance Guarantee Scheme and support increases in business employment and growth through the creation of a new Capital Growth Fund, in 2011-12 and 2012-13.
 
The Chancellor announced that the manufacturing sector will pay less tax overall, which will complement the support being given to the country’s Manufacturers by the Regional Development Agency, through the Manufacturing Advisory Service. However, manufacturers will feel the impact of the proposed reduction in the rate of allowance for plant and machinery assets and longer-lived assets in April 2012, to their bottom line.
 
Yorkshire Forward also welcomed the continued commitment to establishing a Green Investment Bank to secure investment in the low carbon economy as an area in which Yorkshire Forward has invested and supported growth.
 
Terry Hodgkinson, Chair of Yorkshire Forward comments: “The measures announced yesterday to rebalance the nation’s economy, complements the work being done by England’s RDAs as we support enterprise, innovation and skills to maximise the UK’s opportunities for growth.
 
“It is encouraging to see continued support for SMEs as the bedrock of our economy and growth industries such as advanced manufacturing and clean energy.”
 
The budget outlined plans to reduce public sector spending with a two year pay freeze on those civil servants earning over £21,000 per year and outlined a reform to pay across the public sector. The Civil Service Pension scheme will also be investigated with interim findings presented in September and a review into raising the pension age to 66 years.
 
The Government confirmed plans to enable locally-elected council leaders, working with business, to lead local economic development. As part of this change, it was also confirmed that Regional Development Agencies will be abolished through the Public Bodies Bill.
 
Yorkshire Forward now awaits a White Paper due in the summer which will set out detailed proposals to replace the RDA network with the creation of ‘Local Enterprise Partnerships’. These Partnerships will continue the coordination of public and private investment in transport, housing, skills, regeneration and other areas of economic development.
 
Mr Hodgkinson added: “It is clear that Yorkshire Forward will not continue in its current form. We accept change is coming and we are ready for it.  However, this is as much about the functions performed in the region as their form. We have a talented and highly effective workforce within the organisation and in the wider region; making a real difference on the ground and working in partnership for the economic development of Yorkshire and Humber.
 
“The future of any local economic partnership arrangements are in the hands of our locally-elected councillors and business leaders, and we are confident that they will advocate a way forward that is right for the people and businesses of Yorkshire and Humber.”