Support for tech start-ups and an commitment to improving infrastructure won praise from Yorkshire’s business community as Chancellor Philip Hammond provided the first update on the nation’s finances since the vote to leave the EU.
In a bid to stave off foreign takeovers of digital firms, Mr Hammond unveiled a £400m injection into venture capital funds through the British Business Bank. The government-owned bank does not invest directly in small firms but works with venture capital funds and funding platforms to finance small businesses.
Mr Hammond said he was also launching a Treasury-led review looking at the barriers to accessing capital in the UK.
Tech is one of Yorkshire’s fastest growing sectors with digital jobs in the region increasing at 10 times the rate of jobs in non-digital industries.
Stephen Wright, chairman of West and North Yorkshire Chamber of Commerce, said: “Investment in the digital infrastructure and support for our rural communities also ensures that new and historical areas of our economy are being backed for future growth and prosperity. Business confidence is crucial right now – we may be facing uncharted territory and so reassurance and certainty is important for business right now.”
Liz Ward, of law firm Virtuoso Legal, said: “The statement is of great interest to our technology clients as the government seems to understand that they have to actively assist in the generation of IP in order to grow the economy. So far, spending has been promised for universities and also to help technology companies to scale and grow.
“One of the biggest problems is that, whilst the UK generates lots of great start up and SME technology businesses, once they grow they tend to be snapped up by overseas investors. We need to support these companies and help the UK retain talent and ownership of businesses.”
Richard Flint, chief executive of Sky Betting and Gaming, said: “Priority must be given to projects that will speed up travel times between the region’s cities and help create a larger pool of digital talent for businesses like ours to recruit from.”
Fears that the Northern Powerhouse project would vanish along with Mr Hammond’s predecessor from Number 11 appeared to evaporate with pledges to hand more power to combined authorities and provide additional funding for Local Enterprise Partnerships. But Stuart Watson, Yorkshire & Humberside Senior Partner at accountancy firm EY, said it was now crucial that Yorkshire and the rest of the North did not fall behind Manchester.
“I welcome the government’s continued commitment to the Northern Powerhouse with the publication of its Northern Powerhouse Strategy, announced in today’s Autumn Statement. As highlighted in the report, with an economy worth £304 billion, if the North of England was a country it would be one of the largest economies in Europe, similar in size to Belgium. It is good to see the continued emphasis on giving upcoming mayors the necessary powers and funding to ensure their areas work collaboratively and function effectively as cohesive economies. The focus, for now, lies strongly on the North West however. It will be good to see how devolution can be expanded fully across the whole of the North.”
Elsewhere Mr Hammond reaffirmed the pledge to cut corporation tax to 17 per cent and increased the living wage to £7.50. He also unveiled plans to make it easier for British firms to export by doubling the capacity of UK Export Finance.
However Richard Wright, executive director of Sheffield Chamber of Commerce, said the measures would not go far enough.
“The Chancellor identified that exports have fallen as a proportion of GDP for years despite massive investments by the Government in trade support through BIS, UKTI and now DIT – but it’s no good changing the name.
“The way that support is given needs completely overhauling to support that reflects the commercial environment in which trade is carried out - less process and more results driven.”