FT.Com - Budget Special Report 2000

FT.com Home

Top Stories

News & Politics

Economy

Business & Finance

Budget & the Family

Taxation

Speech

The Red Book

Comment

Guide

Calculators

Video Comment

Forum

Guide

FRIDAY MARCH 17 2000

UK MAP: Regional breakdown

map

Eastern East Midlands London North-East Northern Ireland North-West Scotland South-East South-West Wales West Midlands Yorkshire & the Humber

UK regions Eastern

East of England Development Agency aspires to the title of 'Innovation Capital of Europe'. The web site offers an array of regional business data, including details of the EU-backed Regional Innovation and Technology Transfer Strategy. This provides for a comprehensive analysis of the area's technology needs.

eastern Gross average earnings per full-time employee: Ł9.90 / hr (1999)

Average property price: Ł80,696 (4th qtr 1999)

UK regions East Midlands

East Midlands Development Agency's regional strategy emphasises skills, entrepreneurial culture, investment incentives, and communications technology. Uniquely, it has electronically published a policy on openness and freedom of information. The site also hosts the agency's proposal for an University for Food to strengthen and develop the region's gastronomic industries.

East Midlands Gross average earnings per full-time employee: Ł9.00 / hr (1999)

Average property price: Ł70,826 (4th qtr 1999)

My Budget

Bill Richmond
Job: CEO, Technology Active Solutions
Location: East Midlands
Bill Richmond started the East Midlands-based Technology Active Solutions in 1992, making touch-screen information systems "which don't look like speak-your-weight machines."
As the owner of a small business, he is ambivalent about speculation that Gordon Brown's "Budget for Enterprise" will include tax relief on share options, believing that larger businesses already have the edge in using benefits to pay their employees more efficiently.
A further problem is that "Innovation is a risk. It is not a risk that the banks welcome or generally seem to understand," he says.
So, he would like to see a regional investment scheme which would act as a venture capital fund for the research and innovation needs of local companies.
His other concern is education. As a school governor, Mr Richmond strongly disapproves of regional disparities in funding for schools.
"The local primary school where I am a governor will receive Ł43,500 less this year than a similar school in Hertfordshire. This Standard Spending Assessment, set by the government, severely handicaps the life chances of our local children."
Esther McHugh

UK regions London

Government Office for London purports to review all aspects of living and working in the capital. The site concentrates on efforts to obtain funds for London from the EU and the government's regeneration budget, but also acts as a mini-portal, linking to a number of London-related business organisations. For help in setting up your own business, visit the Small Business Service.

London Gross average earnings per full-time employee: Ł13.40 / hr (1999)

Average property price: Ł157,624 (4th qtr 1999)

My Budget

Chris Thomas

Age: 45
Job: Internet entrepreneur, Way To Blue
Location: London

At the top of Chris Thomas's wishlist is the scrapping of IR35, the "tax on entrepreneurs" that removed special tax status from one-worker services companies.

Mr Thomas, who runs a Soho-based entertainment internet company called Way To Blue, says the "unworkable" rules, which force companies to pay National Insurance for some contract workers, "penalises" computer services companies.

"There are so many costly regulations for employers and IR35 just adds to them. For small companies, it is like having your legs strapped together," he says.

Andrew Ward

North-East

OneNorthEast bases its outlook for the region on recent surveys which credited the north-east with high scores on the quality of life index. As a result, the site focuses on the area's cultural and educational achievements, examining them alongside its business climate and infrastructure. Investment is promoted by industry sector, with information on leading companies, and a breakdown of where existing business funds have come from.

North-east Gross average earnings per full-time employee: Ł8.90 / hr (1999)

Average property price (North av.): Ł62,921 (4th qtr 1999)

OneNorthEast's Budget recommendations:

On taxation
• Reform of the tax system to assist SMEs to invest and expand, including changes to capital allowances and a cut in corporation tax
• Measures to persuade banks and other financial institutions to join the DTI and Europe in supporting regional venture capital
• Encouragement for businesses to work more closely with schools and universities through the provision of tax breaks rather than grants
• Tax incentives to private developers to reclaim derelict and polluted sites

On spending
• Further government spending on the development of e-commerce and business clusters
• A reduction in the number of regional business programmes to provide greater flexibility in the management and investment of resources; the ability to wire funds to high priority initiatives

My Budget

Anne Preston

Job: Head of Potto
Location: Teesside

Anne Preston is head of Prestons of Potto, a Teesside based road haulier whose 195 trucks operate throughout the UK, mostly in south-east England.

Awarded an MBE for her services to the road transport industry, Mrs Preston is the Road Haulage Association's first ever female board member.

She says that the volume of business is good for Prestons, but margins for UK hauliers are very low.

"The big problem we have is government taxation," she says. A 40 tonne truck, covering 70,000 miles per year, costs £25,517 in vehicle excise duty and fuel duty in the UK, against £10,515 in France and £7,425 in Spain.

"I fear the chancellor will put up vehicle excise duty 5% or 6%," she says. "That will cause uproar - we want to get a level playing field with our European competitors."

The level of the likely rise in fuel duty is a big worry too. "We are asking for the essential fuel user rebate. We are essential to the economy of the UK. As long as I live, there will never be a railway to a supermarket."

Chris Tighe

Northern Ireland

The Industrial Development Board's raison d'etre is to develop business in Northern Ireland, with domestic or foreign companies. Trade International Northern Ireland is the agency's dedicated export team. A particular aim of this regional development office is to promote social inclusion and equality by focusing on areas of extreme need.

Northern Ireland Gross average earnings per full-time employee: Ł8.70 / hr (1999)

Average property price: N/A (4th qtr 1999)

North-West/Mersyside

North-West Development Agency has an Innovation Team whose brief is to exploit new commercial ideas and explore ways of improving productivity, efficiency and technological creativity to heighten the business attraction of the region. The site features the north-west's 'Strategy Towards 2020', a policy plan which encompasses both business infrastructure and the development and maintenance of the region's workforce.

North-west Gross average earnings per full-time employee: Ł9.40 / hr (1999)

Average property price (North av.): Ł62,921 (4th qtr 1999)

My Budget

Jo Stagg

Age: 21
Job: Final Year Politics Student, University of Manchester

Politics student Jo Stagg will graduate from Manchester University this summer saddled with £2,500 of debt. Her housemate has £7,000 worth of loans and overdraft.

Ms Stagg would like maintenance grants restored to students, but accepts that this is unlikely. In their absence she wants tax-breaks for graduates in their first job.

"University leavers are faced with huge debts at the same time as paying for work clothes, buying a car and moving house," she says.

According to Ms Stagg, students are increasingly attracted to careers in new media by share options offered to dotcom employees. "They should be encouraged as an incentive," she says.

Andrew Ward

Scotland

Scottish Enterprise has an annual budget of about Ł450m and 1600 staff in offices around the world. SE's goal is to stimulate the Scottish economy and to help Scotland move from a traditional, craft dominated economy to a modern, high skilled economy. The web site contains an up-to-date catalogue of the opportunities available to Scottish companies overseas, particularly in areas such as oil and gas, food and drink, and healthcare.

Scotland Gross average earnings per full-time employee: Ł9.30 / hr (1999)

Average property price: N/A (4th qtr 1999)

My Budget

Ian Moncrieff

Job: Farmer
Location: Dundee

Ian Moncrieff runs a 2,000 mixed farm at Invergowrie near Dundee, producing cereals, potatoes, other crops and beef.

What he'd most like to see is a cut in interest rates and a realignment of the currency - even though these won't be on Mr Brown's agenda. "Farmers' profits are down about 45 per cent, and half of that is the currency," he says. "Tax is not directly an issue for farmers, most of whom are either making a small profit or a large loss."

Where he believes Mr Brown could help is in offering tax incentives to enable farmers to get closer to the consumers. Mr Moncrieff says there is still a "good margin" to be made in food production, but that farmers are not seeing it.

He'd like to see tax relief on farm machinery or inputs, or any incentives which would make it easier to form farm co-operatives which can sell directly to the consumer. "The government could go a long way towards helping farm co-ops set up," he suggests.

He also believes that Mr Brown should consider tax incentives for farmers to give up land for other purposes - such as leisure, tourism, golf or off-road driving. "The more land that comes out of agricultural production, the better," he says.

Mark Nicholson

South-East

South-East England Development Agency covers the diverse set of counties between London and the Channel. SEEDA views its proximity to the continent as a key competitve advantage for the region and aims to make it one of the top ten in the EU. The site showcases its Regional Economic Strategy, which includes a plan to create enterprise hubs to pool the research and resources of groups of businesses, and facilitate start-ups.

South-east Gross average earnings per full-time employee: Ł10.70 / hr (1999)

Average property price: Ł118,145 (4th qtr 1999)

South-West

South-West of England Regional Development Agency covers the counties of Devon, Dorset, Cornwall, Gloucestershire, Somerset and Wiltshire. The site offers an overview of the south-west's political, demographic and economic makeup, and also contains a search facility for locating business properties in the region.

South-west Gross average earnings per full-time employee: Ł9.20 / hr (1999)

Average property price: Ł93,508(4th qtr 1999)

Wales

Welsh Development Agency was established by the UK government in 1976 but is now responsible to the National Assembly for Wales. It works closely with Xenos, the all-Welsh business angels network, matching venture capitalists to companies, and encouraging Welsh start-ups to compete for private funds.

Wales Gross average earnings per full-time employee: Ł8.90 / hr (1999)

Average property price: Ł62,279 (4th qtr 1999)

My Budget

Steve Rist

Job: Joint CEO of Easier
Location: Cardiff

Steve Rist will be hoping for a Budget that will encourage an entrepreneurial culture in the UK.

"We are expecting them to improve tapered relief for people investing in business, which should help the dotcom sector, because we want people to invest for the long term," he says.

"Most of our staff have shares in the company and we will soon introduce a share option scheme, so we will be keen to see less tax on employee share participation."

He will also be hoping that the chancellor will raise stamp duty as is widely expected.

"I think an increase in stamp duty would be good, because it is a targeted duty and a more focused option than a rise in interest rates."

James Pickard

West Midlands

Advantage West Midlands aims to link purchasers with suppliers as part of its Supply Chain Solutions programme. Its vision for the region's industrial development focuses on four key sectors: autos, software, electronics and outsourced business services.

West Midlands Gross average earnings per full-time employee: Ł9.40 / hr (1999)

Average property price: Ł76,495(4th qtr 1999)

My Budget

Warwick Bartlett

Age: 53
Job: Bookmaker, Bartlett's Bookmakers
Location: West Midlands

This year's Cheltenham Festival should have seen business booming in Warwick Bartlett's three West Midlands betting shops. Instead, "a few big punters went missing".

Mr Bartlett believes they migrated to tax-free internet gambling sites, strengthening the case for a cut in the nine per cent betting tax currently levied in high street bookies.

Mr Bartlett wants a three per cent rate, which he says would represent a reasonable premium for the support services and social facilities his shops provide.

"We simply wish to compete on a level playing field," he says.

Yorkshire and the Humber

Yorkshire Forward styles itself as the force behind the region's recent regeneration and development. In addition to promoting the region's supremacy as a place to live, work, trade and invest, the agency is currently using the web site as a vehicle for reassessing Yorkshire's business branding by means of an online survey of local companies.

Yorkshire Gross average earnings per full-time employee: Ł9.10 / hr (1999)

Average property price: Ł63,302
(4th qtr 1999)

Yorkshire Forward's Budget recommendations:

On taxation

• A package of fiscal reforms to reduce the burden of tax and administration on Yorkshire businesses
• Support for the CBI's proposed capital gains tax reform for business angels to boost the enterprise start-up rate
• Tax breaks for firms investing in severely deprived communities

On spending

• A Ł5 million fund to kick-start online trading in the Yorkshire and the Humber region
• Public spending to address the problem of regional disparities in health and education standards
• Investment in public transport schemes to improve regional infrastructure - for example, a rapid rail link between Leeds and Sheffield

And its reaction to the Budget:

Welcoming

• The 100% tax exemption for IT investment. Advice to small businesses going online will come partly from the University for Industry which is co-locating with Yorkshire Forward
• The Ł130m regional venture capital fund, and the chancellor's recognition of the need to support high technology business clusters

Unimpressed by

• The Ł280m spending level for transport. However, Yorkshire Forward is pleased by the emphasis the chancellor placed on improvements to rural transport services

Sources:
Department of Trade & Industry (income figures)
HM Land Registry (property prices)

news ticker

Breaking headlines

me & my budget

What it means to me

labour manifesto

Promises vs. reality

raise a glass
Black economy

gordon brown
Profile

pre-budget

FT.com Special Report

stamp duty
Rate rise