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Welcome for Budget boost to transport and R&D spending in the region

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Businesses in the region broadly welcomed the Budget, particularly the prospect of more spending on R&D and transport infrastructure in the East along with help for small firms to deal with Coronovirus. However there were warnings that the moves to give HMRC preferential creditor status in insolvencies would hit business lending and that the measures on business rates relief were a “short term sticking plaster”.

Stuart Wilkinson, EY’s head of tax in Cambridge, said: "The Chancellor’s announcement that he is set to increase R&D investment to £20bn, contributing 2.4 per cent to GDP, is good news for the region’s universities and for the wealth of innovative businesses operating in the East of England. Regional connectivity also received a boost with the announcement of funding for a new railway station - Cambridge South - and investment in the A428, a major trunk road in the region.”

Other announcements included junction improvements to the A12 East of Ipswich and carriageway dualling and roundabout improvements on the A12 in Woodbridge.

Massive increase in capital spending

Hazel Platt, head of tax, Central & East, Grant Thornton UK LLP, said:"Yesterday the Chancellor planted a few seeds for Boris Johnson’s future plans for the U.K. economy before investing heavily in the fiscal equivalent of stockpiling to see the U.K. through the impending Coronavirus storm. In the process he announced a massive increase in capital spending, coming close to Labour party plans during the election.  With the economic impact of Coronavirus impossible to forecast, and borrowing set to increase this year, we don’t know how the fiscal stimulus will be paid for in the long term and will have to wait until the autumn budget and the five year spending review to find out the full impact on public finances.  And with little mention of Brexit, we will also have to wait for the big decisions about what the business environment will look like when the UK self-isolates from the EU in nine months’ time."

Infrastructure improvements

David Atkinson, regional director for the East of England at Lloyds Bank Commercial Banking, said: “East of England businesses told us that infrastructure improvements are weighing heavy on their agendas, so they’ll be pleased with the government’s commitment in today’s Budget, including the upgrade of the Cambridge South railway station. Our recent business barometer survey revealed that 69% of firms wanted improvements to highways and roads across the region and its surrounding areas to be near the top of the Chancellor’s priorities.”

Long term fix needed on rates

The measures on business rates relief are “short term sticking plaster” and a long term fix is still required, according to Barker Storey Matthews. The property agents’ retail specialist Julian Welch said the relief: “…will bring temporary comfort to some retail operators but anything less than an overhaul of the current business rates regime in England will not address the dysfunction and imbalance on our high streets.”

Digital connectivity

Lloyd Felton, chief executive of County Broadband, which is building full-fibre networks in rural areas across East Anglia, said : “We welcome the news that the government’s plan to bring gigabit capable broadband to every home and business in Britain by 2025 has taken another step forward today.”

“The Chancellor’s announcement that the sector is to receive a £5bn boost to support upgrading rural digital connectivity, together with the news that more private investment in the sector is planned this year, means Independent Networks will have a central part to play in enabling tens of thousands of premises to receive future-ready, full-fibre connections."

‘Perverse’ change on HMRC’s preferential status

However the Budget confirmation that HMRC is to be granted ‘preferential status’ in insolvencies from December 2020, was criticised by the Eastern branch of insolvency trade body R3. R3 Eastern chair Mark Upton, a partner at Ensors Chartered Accountants in the region, said: “The return of HMRC’s preferential status in insolvencies is a badly-timed and ill-considered blow to the UK’s enterprise culture. It will damage business lending and business rescue, and will affect jobs, livelihoods and the economy.

“It’s perverse that on the day that the Bank of England has taken steps to boost business lending, the Government has taken a step in the opposite direction.”

Last Updated ( Thursday, 12 March 2020 11:05 )