Budget: Derby gives its verdict

Chancellor George Osborne decision's to cut beer duty and cancel fuel rises may have gone down well in some sections of Derbyshire. But will Mr Osborne's plan to kick-start the economy work? Business editor Robin Johnson reports.

CHANCELLOR George Osborne said that his Budget was for "hard-working people" – people he termed as the "aspiration nation".

In yesterday's Budget speech in the Commons, Mr Osborne announced measures aimed at making turning around the economy an achievable goal, rather than a mere aspiration.

Before Mr Osborne took the dispatch box, Derbyshire and Nottinghamshire Chamber of Commerce had set out a list of demands. Top of that list was a freeze on business rates and fuel duty.

While their wish on fuel duty was granted, with a planned 3p rise in September scrapped, there was no movement on business rates.

But there were some other bright spots in Mr Osborne's speech for Derbyshire's businesses.

The most notable was a new employment allowance, cutting National Insurance bills by £2,000 – meaning that 450,000 small firms will no longer have to pay.

Chamber chief executive George Cowcher said: "A number of measures in the Budget were business-friendly and welcome.

"These include the National Insurance Contributions cut for employers, Capital Gains Tax relief and reductions in Corporation Tax, the increase in Research and Development credits, further assistance for start-ups, financial support for working parents and the new voucher scheme to enable small businesses to get support.

"The freeze in fuel duty, incentives to help house buyers and moves to significantly increase Government procurement from small firms were also welcome."

But Mr Cowcher said there were some glaring omissions from the speech. He said: "The Chancellor had a golden opportunity to ease the financial burden on many firms by scrapping damaging increases in business rates but that didn't happen.

"While the announcement of a further £3 billion annual funding for new transport and infrastructure projects is a positive move, the UK needs that investment now, not in 2015-16 as proposed.

"And it is also disappointing to see the Government pushing through further increases to Air Passenger Duty, which will make the UK less competitive and less attractive as an investment prospect.

"The Chancellor and his Cabinet colleagues need to keep front of mind that it is business that drives the economy, creates jobs and wealth, generates economic output and raises the revenue needed to pay for public services and they still need to go further to support enterprise and growth.''

Lucy Haynes, East Midlands regional director for the Confederation of British Industry, said: "There is much in this Budget that should help to improve business and consumer confidence.

"I'm sure that the announcement about the introduction of a new employment allowance, which will take the first £2,000 off the National Insurance bill for every business and charity, will be well received by Derbyshire-based small and medium-sized businesses."

One industry celebrating is ceramics. Mr Osborne said that the sector would be exempt from a controversial Climate Change Levy on energy costs. Government ministers introduced the taxes to fund renewable energy programmes, like building more nuclear power stations, and to help the country meet targets to cut CO2 emissions.

But the British Ceramic Confederation has warned that for ceramics firms, which use a lot of energy to fire kilns, the extra costs could be crippling.

The announcement will help Royal Crown Derby, in Osmaston Road, and Denby Pottery in Denby.

But perhaps the biggest winners in Mr Osborne's Budget was the property and construction sectors.

Richard Farnsworth, tax expert at Castle Donington accountants and business advisers PwC, said the Help to Buy scheme could be a "game changer" for the region.

He said: "This is potentially a game-changing development for the region's economy, which could add a significant amount of sparkle to the housing market.

"The move will be a significant boost to the construction sector and help to create more jobs."

Melanie Powell, senior lecturer in economics at the University of Derby's Business School, agreed that moves by the Chancellor to help the property market were significant.

She said: "The Help to Buy scheme could really help the housing market as could the £130 billion mortgage guarantee announced by the Chancellor. But it is all dependent on the banks playing ball and asking for lower deposits.

"As far as the announcements on fuel and beer are concerned, although they may make us feel a bit better, it is effectively window dressing."

Another boost from the housing market was a pledge by the Government to back the building of 15,000 more "affordable" homes.

Peter McCormack, chief executive of Derby-based housing provider Derwent Living, said that the Government had recognised the importance of the building and construction industry, but much more needed to be done to achieve growth in the economy.

He said: "Further investment into affordable housing is a step in the right direction. It is a start but we need much more housing investment to kick-start the economy."

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