Rishi Sunak delivers his economic statement to the nation on Wednesday (July 8), with several proposals designed to stimulate the economy having already been trailed.
These include offering UK companies £1,000 for every trainee offered a work placement, a possible ‘stamp duty’ holiday later this year plus a temporary cut in VAT.
Here, the leaders of businesses and organisations throughout the Tees region reveal their own thoughts on the measures that could make a difference in this region.
Lee Watson, tax director at Clive Owen LLP
The government has gone to unprecedented levels in terms of support for businesses and individuals during the coronavirus crisis.
Ultimately, the chancellor must balance the books at some point, while at the same time encouraging investment in the UK from both home and abroad.
The prime minister has already refused to rule out tax increases to fund the recovery but, in the short term, he needs the country to start spending again. I forecast a small decrease in VAT to encourage households to stimulate the economy by buying ‘big ticket’ items, such as cars. However, longer term, tax increases feel inevitable.
Companies, especially here in the North East, continue to underclaim research and development tax credits. However, the rate could be increased to encourage further investment and the scope broadened to include data and cloud computing.
Employers would also benefit from a cut in their National Insurance bill, especially in light of the forthcoming reductions in the job retention scheme grant.
Chris McDonald, chief executive of Teesside-based research and innovation centre the Materials Processing Institute
This region must take advantage of the huge opportunities offered by what is termed the fourth industrial revolution, one based on the rapid growth of digital technologies that will transform both our economy and society.
The government must invest more in research and innovation, which is the key to our future competitive success on the global stage, while ensuring businesses in this region have access to the right skills, knowledge and support to succeed.
We are seeing the fastest pace of change in manufacturing processes since Victorian times and we must accelerate forward to a low carbon future based on data-led innovation, the efficient use of resources and creation of new industries based on these products and technologies.
Christine Gilbert, sales director of Stockton-based telecommunications experts Odyssey Systems
I would like to see the government take stock of the situation following a very challenging three months and not feel pressured into producing headline-grabbing measures simply for the sake of it.
The reality is that the government has succeeded in supporting many businesses through the worst of this crisis with its furlough scheme, support for the self-employed and a host of other measures including business support grants.
There is huge demand on the government for funding from an array of sources, but I would urge prudence as at some point the books must be balanced.
Martin Anderson, managing director of Stockton-based call centre, Lemon Business Solutions
The chancellor has introduced many excellent measures over the past few months to keep the country going. In the summer statement, I would like to see this continue, with further measures introduced to kick-start the Teesside economy.
It’s been a rollercoaster ride for businesses in our area but, in some ways, an even greater challenge may lay ahead. As the country comes out of lockdown and initial government support is withdrawn, we need the chancellor to come out with even more creative ways to give businesses the breathing space to get back on their feet, grow and create jobs quickly.
I feel very positive about how Tees Valley will recover from the coronavirus crisis – we’re resilient and we work hard. I look forward to hearing how the chancellor will support this recovery.
Bob Borthwick, director of Stockton-based Scott Bros
The chancellor must steady the ship as we emerge from the pandemic crisis and the focus must be on stimulating the economy.
We need to reboot this country’s economy by getting people back into the habit of spending. One of the easiest methods would be to reduce VAT, combined with a cut in the huge amount we all must pay in fuel duty.
As a further stimulus, the chancellor should consider reducing the burden of National Insurance and tax payments – an ideal opportunity to level up the country and help out ordinary people.
When applied to business, such measures would boost employment rates through lower labour costs. Meanwhile, any reduction in Corporation Tax would encourage more businesses to invest in their future.
Nicky Jolley, founder and managing director of Darlington-based HR2day
The furlough scheme provided breathing space for many businesses throughout the COVID crisis, and with the scheme evolving to provide support up until October, I would like to hear how the chancellor plans to help businesses who may still be struggling after that point. A further extension of furlough may not be the best way to provide this support, but I sincerely hope there will be some provision in place to prevent further redundancies towards the end of the year.
I also hope there will be a clear response as to how those left unemployed by the virus will be supported in finding new work in the future. I hope that more funding will be put into training and development for those that would benefit from it and support for people who may need to go down the route of self-employment. I’m aware the public purse has been stretched by the pandemic, but we must not forget those who find themselves in financial difficulty after such a mentally trying time.
Rosemary Du Rose, CEO of Beyond Housing
The recent ‘New Deal’ announcement provides some welcome updates for the housing sector; specifically, clarity over the future of the affordable homes programme and the potential to simplify planning to help stimulate growth.
We recognise the challenge facing the UK and in particular our regions which have often lagged behind in growth and investment and would therefore hope to see greater detail on how the Government intends to help ‘level up’ our communities.
We also feel that there is a significant opportunity for the UK to become leaders in green energy and these opportunities should be at the forefront of any future fiscal policy. We look forward to future announcements and remain committed to supporting the Government’s recovery plans.
Paul Gibson, a director and chartered financial planner at Stockton-based Active Chartered Financial Planners
No change will be great news at this financial statement, as the economy needs time to recover.
We’ve been through an extremely turbulent few months, which has cost the government billions, and many people have seen their personal incomes drop due to being furloughed, having their hours reduced or losing their jobs.
There needs to be some time for us as a country to catch our breath, take stock of the economic situation, assess the problems and once we have a clearer picture longer term decision can be made.
While it might be tempting to try to make changes to taxes, allowances or pension legislation to try and make back some of the money now missing from the public purse, this is simply too soon and would be incredibly detrimental at this point.
The focus will need to be on the spending and investment needed to restart the economy providing help where needed most. It will also be important for the government to give a clear plan on future investment projects that will help stimulate the economy in the next 12 months and beyond.