It’s been a huge Budget for business – with Chancellor Rachel Reeves increasing taxes by £40bn to “drive economic growth and restore economic stability” – with businesses being asked to contribute more than half that amount.
The Autumn Budget 2024 – which also included a range of spending announcements on education, the NHS, affordable homes, and a continued freeze on fuel duty – was greeted with a mixed response from businesses and organisations across the North East and North Yorkshire.
David Baggaley, Tax Partner at chartered accountants and business advisory Clive Owen LLP, with offices in Tees Valley, Durham, York and Newcastle, said: “This year’s Budget was always going to be a keen topic of interest following months of uncertainty.
“The decision to subject inherited pension pots to inheritance tax from 2027 in addition to the restriction of Business Relief and Agricultural Property Relief could be a cause for concern for many individuals. This will be particularly relevant for those in the rural and agriculture sectors and family businesses, which could have significant implications for future financial and succession plans.
“Despite a rise in Capital Gains Tax, it was pleasing that the hike wasn’t as extreme as had been speculated. This increase however will be a blow to investors who will see a reduced return on their investments.
“Next year’s increases in the National Minimum Wage and National Living Wage will be welcome news to workers but rises to employer National Insurance contributions will substantially raise payroll costs, necessitating careful financial planning for businesses. This increase in NIC could result in firms withholding investment in recruitment as a result, with the reduction of the secondary threshold to £5,000 potentially impacting employment costs further.
“That being said, the doubling of the Employee Allowance offers some relief, particularly for SMEs and those hiring their first employee. While it provides some certainty to businesses that the corporate tax rate remains at 25%, we will have to wait to see where the ‘Corporation Tax Roadmap’ takes us before we start planning too far into the future.”
Stewart Dickson, chief executive of Weardale Lithium, based in Weardale, County Durham, said: “The government’s acknowledgment, as part of the new Industrial Strategy, of the vital role critical minerals have in creating a sustainable battery manufacturing sector in the UK is welcome, but also highlights the need to invest in domestic production.
“State-backed loans for the importing of materials such as lithium will support short-term requirements, but with only a fledgling commercial lithium industry in the UK, but with resources, such as those we have discovered and proven can be extracted in Weardale, the government can help accelerate a more sustainable opportunity.
“UK production and refining of lithium will not only be a cornerstone of the future electric vehicle and renewable energy industries, but also create high value jobs and deliver income for the treasury.”
Jonathan Carter, Director of Darlington-headquartered 186 Property Solutions, said: “Rachel Reeves’s Budget announcements bring a mixed outlook for our industry. On the positive side, I welcome the increased capital spending for schools, with £1.4bn allocated for rebuilding and £2.1bn for maintenance, as well as the £3.1bn capital boost for the NHS, including £1bn dedicated to repairs and upgrades.
“For a company like ours, dedicated to refurbishing, retrofitting, and maintaining public and commercial buildings, these investments are essential to strengthening core sectors and provide opportunities to deliver sustainable, high-quality solutions.
“However, the increase in employers’ National Insurance contributions from 13.8% to 15%, along with the reduction in the secondary threshold from £9,100 to £5,000, places significant additional strain on operational costs. For businesses like ours, where skilled labour is critical, these increased employment expenses risk slowing growth and complicate an already challenging landscape for the construction sector, where rising employment costs are compounded by material inflation and supply chain pressures.”
Kate Hellens, managing director at North East affordable housing provider, Hellens Residential, said: “The government’s £500 million boost for the Affordable Homes Programme in today’s budget is a significant step forward in supporting much-needed regeneration and the affordable housing supply for individuals and families across the North East.
“While it’s a welcome move, the scale of housing needs remains substantial, and we must keep focusing on sustainable development for communities, which will hopefully be addressed when the government announces its revised NPPF, expected in the new year.”
Fraser Brown, managing director of Richmondshire-based automotive consultancy, MotorVise, said: “It’s a mixed bag for the automotive industry. While the government’s commitment to supporting the transition to electric vehicles (EVs) is commendable, the measures fall short of what is needed to truly accelerate this shift. The additional funding for EV infrastructure, including charging stations, is a step in the right direction, but we need more aggressive targets and incentives to encourage both manufacturers and consumers to fully embrace electric mobility.
“The British motor industry is a cornerstone of our economy, and it is encouraging to see some recognition of this in the Budget. However, the support measures for traditional automotive manufacturing seem insufficient given the current economic challenges. We need more robust policies that not only protect existing jobs but also foster innovation and competitiveness in the global market.
“One of the most pressing issues is the need for a clear and comprehensive strategy to support the entire automotive supply chain. The Budget’s focus on green technology and sustainability is positive, but without a detailed plan to assist suppliers in transitioning to new technologies, we risk leaving many behind. This could have a detrimental impact on the industry’s overall health and its ability to compete internationally.”
John Davison, financial director at Darlington-based Ruck Engineering, said: “The Autumn Budget 2024 presents a mixed bag for us. While the increase in employers’ National Insurance contributions is manageable, the lowering of the threshold is a significant challenge that will require strategic financial planning. On the other hand, the rise in the minimum wage will increase our payroll costs and manufacturing expenses.
“The decision to maintain the current corporation tax rate is a relief, providing stability for our financial planning and growth. We are particularly pleased with the retention of R&D incentives, which are crucial for our extensive research and development efforts, especially in our zero emission pressure washer range. This support will enable us to continue innovating and leading in our field.
“Additionally, the doubling of the employer allowance for PAYE and NIC is a welcome measure for smaller businesses. This will help us manage payroll expenses more effectively and support our ongoing growth. Overall, while there are challenges to navigate, the Budget includes several positive elements that will support our continued growth.”
Sim Hall, MD of Darlington-headquartered Populus Select, a recruitment and research consultancy specialising in science, advanced manufacturing and green technology sectors, said: “The government’s commitment to a modern Industrial Strategy is a promising step forward. By focusing on growth-driving sectors such as advanced manufacturing, clean energy, and life sciences, the UK can set the stage for being a world leader in new technology and job creation.
“The substantial support for life sciences and pharmaceuticals is particularly noteworthy, especially for the North East and South East. The increase in funding for the National Institute for Health and Care Research, alongside the new Life Sciences Innovative Manufacturing Fund, will be helpful for driving innovation and attracting cutting edge businesses to the UK. Furthermore, the emphasis on research and development is a critical component of this Budget. By providing long-term funding for key sectors and ensuring robust support for research and development, we can not only spur innovation but also create high-quality jobs, driving the UK towards a more prosperous and technologically advanced future.”
Rosemary Du Rose, Chief Executive at Beyond Housing said: “The government’s announcement in today’s budget to consult on a five-year social housing rent settlement, allowing rent increases in line with inflation plus 1%, is encouraging. This provides the stability needed for renters, and also allows for investment in new and existing homes, our workforce, and essential services.”
“Additionally, the adjustment in right to buy discounts helps retain more affordable homes, aligning with both long-term housing needs and offering pathways to homeownership.”
