Wednesday, 23 November 2016

Brexit: and the Autumn Statement's impact on Devon

As always, it depends on your standpoint as to how you see Brexit and what is coming out of Westminster.

North Devon likes what the Chancellor has had to say today: 
Autumn Statement: Chancellor delivers ‘refreshing’ package for North Devon - News - North Devon Gazette

And South Devon likes what the Fisheries Minister has to say:
Torbay fishing chief 'optimistic' after Brexit meeting with minister | Torquay Herald Express

This is a wish-list from Exeter, from earlier today:

Autumn Statement wish list for Devon and Cornwall

By WMN_MartinF | Posted: November 23, 2016


How the A30 at Temple in Cornwall will look when the dualling is completed. Many areas in the region would benefit from improved road links , says John Endacott

Today's Autumn Statement comes exactly five months after the EU Referendum vote. It's the first opportunity for the new government to set the agenda as we head towards Brexit. Its importance is not so much about any individual measure that may be announced, but about setting out a vision for the future. What's the plan?

In the last five months there has been much comment on the reasons for the vote in favour of Brexit and we even have a new acronym in the government's lexicon – JAMs (those householders who are Just About Managing). Despite all those newspaper columns, speeches and commentary, as yet we haven't seen a plan. If the objective is to re-balance economic policy so that it isn't solely metropolitan and London centric, then what does that look like for the South West?

It's possible that our new Chancellor of the Exchequer, Philip Hammond, is philosophically opposed to splurging government money on boosting growth – even if it had any. There has been much talk of investing in infrastructure, and businesses across the region are certainly constrained by this. The challenges increase the further west you go.

There has been recent investment at Temple on the A30 in Cornwall and the South Devon link road has made a difference, but there are many areas in the region that would benefit from improved road links, such as North Devon, and an increase in the capacity of the M5 is definitely needed. Despite fine government statements on the need to invest in our rail network to provide a route away from Dawlish, there is no sign of anything much happening soon. So, all the more important to invest in the road network and to better connect road, rail and air transport links.

Strategic leadership on infrastructure investment is required. This is something our Local Enterprise Partnerships (LEPs) have been grappling with and there are a range of infrastructure projects that have been put forward by them for the next round of the government's Local Growth Fund.

The outcome of those bids will be known soon, but it remains to be seen how areas without an elected mayor will fare. At last month's South West Growth Summit in Exeter, Communities Secretary Sajid Javid warned that to get a good deal, you have to have a mayor. We don't have mayors for our LEP areas so we may find ourselves well down the pecking order.

Mr Javid also has housebuilding on his agenda and Mr Hammond continues to mention planning barriers to building. Regardless of political philosophy, the reality is that our LEPs are bidding for government money to help unlock development sites for housing, and pump-priming of sites, such as link roads, is vitally needed.

Strategic considerations aren't just about infrastructure though. We have some exceptionally good colleges and universities and I recently attended an event on the future of farming which highlighted the need for us to lead the way on research on agricultural practices to improve productivity and value, and to try to overcome some of the climate issues we face.

We need to value our food production more and invest in it, so a proposed £2 billion investment in R&D announced by the Prime Minister on Monday will be welcome, provided it also includes agri-tech. Succession for farming businesses is also an issue. We need more training and development for the farmers of the future.

So what else could the Chancellor do to assist with helping to boost the economy without departing from his principles?

We need to re-build our construction sector and 20% VAT on home improvements reduces demand. We need to re-establish a vibrant sector of local and regional builders doing home improvements and housebuilding and investing in skills and training craftsmen. A cut in VAT on home improvements would boost the sector and enable it to re-build capacity.

Leisure and tourism businesses are vital to our economy. They face rising costs from the national living wage, auto-enrolment (workplace pensions) and business rates increases. A cut in VAT for hotels and restaurants would help them to absorb the impact of these government-induced cost increases.

Businesses affected by the national living wage and auto-enrolment would also be boosted by a cut to employers' national insurance (the "tax on jobs"). This would not only help the leisure and tourism sector but also the care sector which is a large employer in the South West.

Fuel costs are a factor for every business in the region as well as for the JAMs. A reduction in fuel duty would help reduce transport costs for all businesses.

Such measures aren't about trying to provide a short-term fiscal stimulus. They could help support and promote parts of the economy to boost employment and economic activity in the long term.

John Endacott is head of tax at South West chartered accountants and business advisers PKF Francis Clark

Autumn Statement wish list for Devon and Cornwall | Plymouth Herald

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