Newspaper article The Journal (Newcastle, England)

Graham Robb Columnist

Newspaper article The Journal (Newcastle, England)

Graham Robb Columnist

Article excerpt

NEXT month I officially start my term as chairman of the Institute of Directors (IoD) in the North East.

I have already been talking to dozens of members and businesses and I can say without qualification that they are all enthusiastic supporters of the North East and want to see our region prosper.

Tomorrow, the Chancellor presents one of the most important budgets of his term of office. Its decisions will start to affect the economy in the months before a landmark general election, at which time the choice before the public will be most diverse for a generation.

As usual before a budget, the clarion call of vested interests is at its loudest; more money for this department, more resources for that project or larger grants for our local council.

The IoD takes a different stance. It knows that the tactical spending of public money can only come about if the Government pursues strategic decisions that give the Treasury money to spend in the first place. It also knows that the public deficit - still more than PS100bn per year - is holding back the wider economy.

In its submissions to George Osborne the IoD has taken the high road. It wants the Government to remain focused on deficit reduction and target incentives at the business sector, which will create the wealth to generate future income. The IoD does not believe in the distribution of phantom cash that has yet to be earned, but does believe in incentivising the organisations and entrepreneurs that will 'earn' us into lasting recovery.

The IoD wants to see the following priorities considered in the budget : A freeze in business rates until re-rating in 2017 and an increase in relief for small businesses; A simplification of corporation tax for mid-sized businesses to reduce compliance costs; A simplification of national insurance so that it lines up with income tax; To use money from the sale of public assets to reduce public debt.

IoD members were extensively consulted about their priorities and a number of other issues also came out of the consultation. One was the issue of bracket creep, whereby people start to pay higher rate, 40%, tax too soon. …

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