Budget 2014 – North West analysis

For households/families

311,000 people in the North West will be taken out of income tax altogether when the Personal Allowance rises to £10,000 this April, and another 31,000 will come out of tax when the allowance rises again to £10,500, as announced in this year’s Budget. 2.68 million people will see an average real terms gain of £61.

Apprenticeships Grant for Employers (AGE) will be expanded in 2014-15 and extended to 2015-16. This will build on 6,680 apprenticeship grant payments in the North West up to July 2013.

Extending the Help to Buy: Equity Loan scheme to 2020. The scheme has already supported 1,716 purchases of new homes in the North West.

From Autumn 2015, tax-free childcare will cover 20 per cent of working families’ childcare costs up to a limit of £10,000 a year. This will help 710,000 children in working families in the North West with 25 hours of childcare a week for a child under two saving on average £980 a year.

The North West TUC today questioned what steps the government was taking to tackle unemployment in the North West as unemployment rose across the region on the day George Osborne’s budget was announced.

Figures released by the Office of National Statistics (ONS), show that unemployment in the North West increased by 22,000 despite a national fall in unemployment. Figures show that whilst the North West unemployment rate stands at 8.1%, it is much higher than the England average (7.2%) and the South East rate (5.2%). The North West TUC say that this is creating a divide in the UK and leaves some areas facing a much bigger challenge to get people back into work and sharing in any potential recovery.

Lynn Collins, NWTUC Regional Secretary, said, “Today’s figures tell us that more action is needed to tackle unemployment. There is a stubborn gap between ourselves and other parts of the country that needs bridging with investment is jobs, skills and wages. Today was an opportunity for the government to tell us how they intend to do that and instead we are left disappointed.”

As George Osborne took to the Despatch Box to deliver his Budget today, the North West TUC says many will have been left disappointed at what he had to say. They say the increasing number of those out of worker will be continually hit – by a lack of investment in creating jobs, a tightening cap on social security spending and when they do get back in to work, pay that fails to keep track with inflation.

Lynn Collins, NWTUC Regional Secretary, said, “George Osborne told us this was a Budget if you are a maker, a doer or a saver. In reality, it offered little to those wanting to be a maker, doer or saver. People out of work across our region, often through no fault of their own, are not offered much by the Chancellor today. Instead of announcements about investment in jobs, they were told that the government intends to place a further cap on social security that many have paid into through national insurance over the years. Instead of the help and support at times of need, they are hit further.

When people do get back into work, they face a growing crisis in living standards as pay fails to keep rate with inflation meaning real terms pay cuts for many and difficult choices for families on sacrifices they make to be able to afford their home or feed themselves and their children. George Osborne thinks helping people save is the answer, with the rise in ISA limits to £15,000 per year, instead of helping the 160,000 workers in the North West who are paid the minimum wage and don’t even earn £15,000 in a year.”

The North West TUC says that today’s Budget announcement reinforces why pay must be tackled and they intend to raise this issue with action in the coming weeks as part of Fair Pay Fortnight, being held throughout the country.

For businesses

Every business in the North West will benefit from the capping of the carbon price support rate announced today. Particularly energy intensive industries will also benefit from compensation for higher energy costs caused by government energy policy. 

11 Combined Heat and Power plants in the North West are likely to benefit from Government support announced in the Budget. 

The business energy package in total will be worth at least £773 million in the North West.

Announced at last year’s Budget and starting this April, the new Employment Allowance will offer £2,000 cash to up to 137,000 employers in the North West.
Businesses in the North West will also benefit from the doubling of the annual investment allowance to £500,000 until the end of 2015.

£20 million Regional Air Connectivity Fund will encourage airlines to start flying new routes from regional airports to increase connectivity and boost local economies, including Liverpool and Blackpool airports.

Government has asked HS2 Ltd to develop proposals on opening the line to Crewe six years earlier than planned and building a hub station there providing better connections for London, the North West and Scotland via the hub.

Tony Attard, Chair of the Institute of Directors North West and Chief Executive of Burnley-based manufacturer Panaz Limited, said: "As both an entrepreneur investor, chairman of a construction company and CEO of a North West manufacturer, I thought that the Budget promoted growth encouraged exports and helped the re-shoring of manufacturing.

"I am sure that it will be welcomed across the North West business community.

“The increase in capital investment allowance from £250,000 to £500,000 will be a great incentive for business to invest in new equipment and technology, and the reduction in carbon tax to reduce energy costs further helps manufacturing.

“Incentives to invest in new companies with an extension to the SEED investment scheme is welcome, as well as research and development tax credit increases. Incentives to take on more apprentices and tax breaks for the under 21s will also help employers wishing to take on more young people.”