Tax cuts to help small firms and big spending plans for infrastructure - including HS3 and a trans-Pennine tunnel - in the Budget were welcomed by business leaders in Sheffield.
The Chancellor announced corporation tax would fall from 20 per cent today to 17 per cent by 2020 and small business rate relief would be expanded with the threshold rateable value set to more than double from £6,000 to £17,000 from next month. At the same time the higher rate will go up from £18,000 to £51,000.
Some 600,000 SMEs will pay no business rates at all “saving them up to £6,000-a-year forever,” he said.
He also promised to radically simplify their administration and fund a “dramatic improvement” of services for HMRC.
Mr Osborne also announced action to close a loophole to prevent foreign multi-nationals trading in Britain from avoiding VAT.
The steel industry was spared further pain after he promised it would not be hit by plans to abolish the “bureaucratic and burdensome” Carbon Reduction Commitment energy efficiency scheme and replace it with an increase in the Climate Change Levy.
A cut in fuel duty was viewed as being good for those running a fleet while plans for small modular nuclear reactors - being developed at the Nuclear Advanced Manufacturing Research Centre in Rotherham - were given a boost with the launch of a competition to find the best value design. Some £30m will be allocated to fund to develop nuclear skills.
Chris Humphries, tax partner at BHP Chartered Accountants, said the corporation tax cut and business rates changes were “fantastic.”
But they had to be balanced against two costs to business announced in previous Budgets that were coming in next month: the apprentice levy and national living wage.
And there was nothing specifically for manufacturers investing in plant or machinery.
Mr Osborne also promised to develop plans to ‘transform’ east-west road connections, including the green light for HS3 between Manchester and Leeds and £75m to develop a business case for a trans-Pennine tunnel under the Peak District between Sheffield and Manchester, as well as options to enhance the A66, A69 and the north-west quadrant of the M60.
Former deputy prime minister Nick Clegg MP said: “Connecting cities in the North sounds great but the reality is these projects are at the back of a very long queue. If the Northern Powerhouse is going to be anything more than warm words then these announcements need to happen quickly.
“The Chancellor should start by committing to Sheffield city centre as the location for Sheffield’s HS2 station and then getting on with it.”
Richard Wright, executive director of Sheffield Chamber of Commerce, said cuts might balance the books, “but in a very hard way.”
He added: “It is well known that international tax rules are not fit for purpose in our modern world of multi-nationals. But it’s not necessarily about them paying more tax, just paying it where they generate the revenues. Whether anti-tax avoidance and evasion measures will raise £12bn by 2020 is, of course, another question.
“The Chamber is very pleased to hear about corporation tax falling to 17 per cent by April 2020. Businesses have taken a hit with the apprenticeship levy and minimum wage so they need some good news. Support for oil and gas industry is welcome, too - they’ve had a hard time and we will need North Sea opportunities in the future.
“We are equally pleased that the small business tax relief threshold is being raised. For a city business region like ours - where the vast majority of companies are SMEs - that will certainly help.
“The Chancellor’s references to the Northern Powerhouse and commitments to key business infrastructure projects are positive but we need action on them now. The green light for HS3 between Manchester and Leeds shows just how important it is for us to get our HS2 station in the right place in the Sheffield City Region - otherwise we could get left behind economically.
“Elsewhere in transport for our region, the announcement on the new trans-Pennine road tunnel is only the feasibility study at this stage but welcome nonetheless. We must keep the pressure up on the links between Manchester and Sheffield - road and rail.
“The Chancellor says the government is ‘acting now so we don’t pay later’ and ‘putting the next generation first’. Amidst all the rhetoric I do agree that we have to plan more around the longer term and not just the next election. Ignoring reality is never an option but you have to react in the right way.
“It is sensible to downgrade the growth forecasts against the state of the world’s economy. Against that I’ve always said that growth is not the only objective - it’s the trade balance that is important. Unless growth is profitable, we might just be losing more money.”
Master Cutler Craig McKay said the greenlight for HS3 could be good for Doncaster Rail College and Sheffield City Region supply chain companies like his company Evenort Ltd and Tinsley Bridge who already operate in the sector.
He added: “£1bn of support for oil and gas industry was timely and will be positive for manufacturing companies in this supply chain, many of which are in Sheffield City Region.
“All the announcements about infrastructure are very positive, and I welcome them particularly, even the Manchester Sheffield tunnel despite it being years away, It’s good to see the concept of Northern Powerhouse developing.
“I thought it was very positive for business generally, and positive for the North and therefore Sheffield City Region. Plenty for manufacturers but we may have to read between the lines.”