Blackfriar: Osborne’s Budget gets a thumbs-up from region’s leaders

Yorkshire’s big businesses welcomed yesterday’s Budget saying it will drive growth in the North of England and benefit those on lower incomes.

Insurer Aviva’s York office said the reduction in corporate tax will encourage business to come to the UK.

“It’s also extremely pleasing that the north of England features strongly in the newly announced ‘enterprise zones’, and in particular two are Yorkshire based – in Leeds and Sheffield. These zones will drive growth and provide a boost to local jobs,” said an Aviva spokeswoman.

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Peter Crook, chief executive of Bradford-based doorstep lender Provident Financial, said the Budget would help his customers.

“We welcome the confirmation of the increase in the personal allowance which will be of particular benefit to those on modest incomes,” he said.

“The reduction in corporation tax is also welcome as it will help business and lead to further job creation.”

Morrisons’ finance director Richard Pennycook was also upbeat.

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“The reduction in fuel duty cannot come soon enough. Clearly this will relieve a little of the pressure on our customers.”

He said that the expansion of the apprenticeship scheme is also helpful.

“Consumer confidence is fragile and families are absorbing a lot of pain with the increase in VAT and the rise in national insurance next month,” he added.

“For many of our customers, the increase in personal allowances puts an extra £3-a-week in their pockets so there’s a little bit of relief but 2011 will still be tough.”

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Housebuilders, including York-based Persimmon, welcomed plans to improve first-time buyers’ access to finance.

George Osborne’s crowd-pleaser was a £250m fund – clawed back from the banks – to share the deposit burden for 10,000 first-time buyers.

Mike Farley, chief executive of Persimmon, said: “We welcome the £250m of assistance that the Government has pledged to help get first-time buyers on the property ladder.

“By enabling an additional 10,000 people to afford their first home, the new Firstbuy Direct scheme will bring a significant boost to the wider housing market and the housebuilding industry in general.”

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John Sutcliffe, finance director at Sheffield-based construction group Henry Boot, said it was a vital step in the right direction.

“It’s got to be a help,” he said. “If it comes to fruition in the way they’re talking about that would certainly help. For first-time buyers, if banks start to move the deposit requirements down from 25 per cent to 10 per cent, I think the market will really begin to recover.”

Lenders including Yorkshire and Leeds building societies said Firstbuy was a welcome move which will help the housing market.

“Any moves which help first-time buyers purchase their first home allowing them to get onto the property ladder will be a boost to the housing market,” said Chris Smith, group direct mortgage manager at Yorkshire Building Society.

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But while the shared equity scheme has an attractive ring to it, Blackfriar has doubts about how many it will actually help. Firstbuy will only apply to new build homes, ensuring buying a house still remains firmly out of reach for many would-be homeowners for whom new build is not an option.

Power station operator Drax was dealt a heavy blow by the Chancellor’s decision to introduce a new charge on carbon dioxide emissions. Drax will have to pay a new levy starting in 2013 that sets a minimum of £16 for every tonne of carbon dioxide it emits.

Shares in North Yorkshire-based Drax fell 4.3 per cent, on top of heavy falls this week, as it warned the tax will push up costs.

Chief executive Dorothy Thompson said: “A carbon price floor rising to £30 per tonne in 2020 will place a material additional cost on our electricity generated from coal and thus the cost of electricity for the consumer.”

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The coal-fired plant operator said the carbon floor price means its shift to burning more biomass is increasingly important.

Steve McGuckin, managing director of Leeds-based construction consultants Turner & Townsend, described it as a positive budget focused on encouraging growth.

“Given that very little public sector money is now available to invest in regeneration, this approach will help re-energise schemes that would otherwise not proceed.

“The simplification of the planning process will allow redundant office space to be converted to housing or other uses, particularly in the regions.”

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But perhaps the most welcome measure for businesses in Yorkshire is the promise to cut corporation tax by two percentage points in April, double the previously planned reduction, and then lower the tax to 23 per cent by 2014.

It is perhaps fitting that the banks, the ones who got us into all this trouble, will be footing the bill.