The Budget included a number of measures that can be welcomed in the south west, according to the South West RDA.
The RDA especially welcomed the Budget’s focus on skills, the green economy and help for businesses struggling in the recession but warned that the region must ensure it can capture its fair share of the benefits on offer.
Commenting on the Budget, Nigel Jump, RDA chief economist, said: “The Budget included a number of measures that we can welcome in the region – some of these are short-term measures and some long-term. Moreover, whilst our unique business (a high proportion of SMEs) and household structure (an older population) suggests some measures will have an impact here, the real question is how we capture, at least, our fair share of the benefits on offer.”
The Budget made a number of proposals for business innovation and workforce skills. The short term doubling of capital allowances should support business investment, the extension of tax loss rules should ease cash flow pressures, and the car “scrappage” scheme should bring forward some demand in the motor supply chain.
Jump added: “The new trade credit insurance guarantees will also help businesses in the south west’s supply chains who are finding it difficult to access traditional bank funding. This will reinforce existing measures put in place since the recession started, such as finance guarantees and transition loans, as well as our own £10 million loan fund for viable businesses. Furthermore, the £750 million Strategic Investment Fund, especially its low carbon and trade related elements, should be a target to aim at for our dynamic and innovative entrepreneurs, as will the promise to look at the tax treatment of intellectual property before the next pre-budget report.”
Jump claimed the Budget made progress in support of the switch to business opportunity and jobs in the “green” economy; an area where the South West has some comparative advantage.
He commented: “As well as the overall carbon budgeting, aiming to reduce UK carbon emissions by 34% by 2020, there is new funding for a range of research and investment in off-shore wind, other renewables (especially, we hope, wave and tidal which are of particular importance to this region), carbon capture and Combined Heat and Power research and investment. There was also further support for energy efficiency in our housing stock.”
Jump said the Budget helped workers by raising the funding for Job Centre Plus to help the newly unemployed and the long-term unemployed, and through its changes to pensioner and child support. The £600 million effort to unblock short term house building will also help a region where housing affordability and supply remain an economic constraint. There was also some modest help for savers, including the potential for the “savings gateway”.
He added: “The Budget predicted a V-shaped recession, with output growth back into positive territory before the end of 2009, recovery in 2010 and above trend growth in 2011. The 2% inflation target was retained. We must expect further tightening in public sector budgeting, however, in the years ahead.”