Focus on building a ‘Northern Powerhouse’ in Manchester and the North-West will be supported by strong support for manufacturing in the Midlands, according to chancellor George Osborne.
In his March budget speech, Osborne pledged a £60 million investment in the Energy Research Accelerator – based in Birmingham.
He also committed £100 million to the automotive industry, traditionally a Midlands-led sector, in an attempt to keep the UK at the forefront of driverless technology.
The regional finance proposals complement pledges to offer business rate relief to councils on both Manchester and Cambridge.
“I can announce today that we have now reached provisional agreement to allow Greater Manchester to keep 100% of the additional growth in local business rates as we build up the Northern Powerhouse,” the chancellor said.
“For where cities grow their economies through local initiatives, let me be clear: we will support and reward them. We will also offer the same business rates deal to Cambridge and the surrounding councils, and my door is open to other areas too.”
Lower corporation tax
The chancellor announced a further reduction in corporation tax. In a much-anticipated move, he lowered the rate to 20%. This is combined with a promise to review business rates, the Annual Investment Allowance and National Insurance contributions.
“I am clear from my conversations with business groups that a reduction to £25,000 [in the Annual Investment Allowance] would not be remotely acceptable – and so it will be set at a much more generous rate,” he explained.
“Today I’m announcing changes to the Enterprise Investment Schemes and Venture Capital Trusts to ensure they are compliant with the latest state aid rules and increasing support to high growth companies.
He continued: “To support five million people who are self-employed, and to make their tax affairs simpler, in the next Parliament we will abolish Class 2 National Insurance contributions for the self-employed entirely.”
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