Date Published: 17-03-2016

Yesterday saw Chancellor George Osborne deliver his 2016 budget, which featured several mixed messages. Despite the fact that he opened by saying that the UK economy is “Strong, Growing and Resilient”, he later went on to forecast growth cuts every year until 2020.

 

Regional Budget:

 

For the first time in history, entire regions in the UK including our home of East Anglia will have an elected mayor which will cover 22 out of 23 councils in Norfolk, Suffolk and Cambridgeshire. This deal will be great for the local economy with it bringing an extra £1billion worth of infrastructure spending to the region, and an extra £70million towards a third crossing in Lowestoft as well as cash for a crossing in Ipswich, which will be massive for transport links.

 

What we do already know is that with an elected mayor, all decisions on how this extra cash injection is spent will be made within the region – not in Westminster. This is truly a once in a lifetime opportunity to pave the way for the region to lead in several key industries including IT, Clean Energy, Genetics and the Environment.

 

Food Manufacturing:

 

It’s a challenging time for manufacturers of soft drinks as the government has announced “sugar tax”, a levy on sugary sweetened drinks, from 2018. We’re not sure what effect this will have on the industry especially considering shares in drinks companies are already sliding with Britvic (a Norwich based company) down since the announcement less than 24 hours ago.

 

The forecasted £520million raised from the sugar levy is said to be used to double the amount of money spent on sports in schools.

 

Gas and Oil:

 

Good news for the North Sea oil industry as George Osborne has announced tax cuts in the gas and oil industry, which means that petroleum revenue tax will effectively be abolished; he says this is only affordable because of the fact that Scotland is still in the UK.

 

This potentially means that jobs in the industry will increase!

 

Technology:

 

George Osborne is pledging to put a lot more into the digital economy through several channels, which is great for the technology and IT industries. He talked about a new Broadband Investment Fund in partnership with private sector investors in order to support the growth of alternative broadband networks, and make us more connected at better speeds.

 

In 2017 he plans of delivering a 5G strategy based on an assessment by the National Infrastructure Commission on how the UK can become a world leader in 5G; this is surely good for the industry as there will be more positions available for those interested in wireless technology.

 

Taxation:

 

Fuel duty has been frozen meaning that the average driver will save £75 a year, and it’s good news for those who like a couple of drinks as beer and cider duty has also been frozen!

 

Corporation Tax is being reduced to 17% meaning we could attract more multinational companies to the UK and around half of all UK based businesses will pay less or no business rates. Both of these combined could potentially free up some cash to increase employment and productivity within the UK.

 

Overall Outlook:

 

As with any budget, there are highs and lows but we’re mostly seeing positives from this year’s budget especially with respect to job growth as Osborne is forecasting that during the current parliament we will see another 1million jobs created.

 

You can view the full 2016 budget report here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/508193/HMT_Budget_2016_Web_Accessible.pdf