Infrastructure should be the focus

Mick Thompson, KPMG’s Office Senior Partner in Newcastle, shares his view on how the Autumn Statement might help business in this region.
As the Government continues to grapple with how to drive economic growth the Chancellor would love to spend more on capital programmes, but any investment will need to be met from reallocation if ‘Plan A’ is to be stuck to.

According to business, infrastructure spend is top of the wish list due to its growth delivery potential. But fiscal policy does not currently support capital investment, for example, in new power stations, waste plants, roads and rail and other capital projects

We’ve just asked large businesses what single measure in the UK tax or regulatory regime the government should introduce over the next 12 months, and tax relief on infrastructure or capital investments was the stand out leader

It seems that such reliefs could unlock tens of thousands of jobs and provide a stimulus for double digit increases in capital expenditure, driving growth.
The UK is the only G20 country which does not give tax relief for this expenditure and in fact our tax system actually deters it.

Beyond infrastructure, more needs to be done to enable regional cities to make fundamental decisions to shape the prosperity of a regional economy. With this in mind, the promise of localism requires attention

Making sure we have the right skills, the right infrastructure and the right businesses to attract investment, as well as exploiting all export opportunities, can only really be achieved by those operating within the market on a daily basis.

A thorough understanding of the idiosyncrasies of each City Region is crucial in making the necessary changes to make all our cities world class. While initiatives such as the City Deals are a step in the right direction it’s not enough.

One of the key roles of government is to create the right environment for all of the country to thrive and I hope the opportunity of this week’s Autumn Statement to improve the conditions for growth is grasped for the sake of this region.