Chancellor Jeremy Hunt has delivered a £80million boost to the North-east by doubling the region's Investment Zone funding to £160million.

And he also signalled support for the Acorn carbon capture scheme near Peterhead, which looks set to benefit from a new £1billion pot for green energy investment.

The measures were among 110 policies unveiled by the Chancellor yesterday as he delivered what has been billed as the biggest package of business tax cuts in half a century.

However, there was no change to the windfall tax which has been choking investment in the North Sea.

What are the Budget headlines?

The big surprise of the day was a bigger than expected cut in National Insurance in his Autumn Statement. The main rate will go down from 12% to 10% from January - although previous tax changes mean many workers will not be much better off.

Mr Hunt also increased the state pension by 8.5% from April and said universal credit will rise by 6.7%.

He also abolished Class 2 National Insurance - a £3.45 a week tax on the profits of two million self-employed people.

The promise to cut National Insurance for millions at the beginning of January, rather than by April as is standard after an Autumn Statement, has fuelled speculation around Westminster of a potential spring election.

Business incentives

A tax break which allows businesses to deduct the full cost of investing in machinery and equipment from their tax bill has been made permanent. Mr Hunt said the policy - known as "full expensing" - would mean that for every £1million a company invests, it would get £250,000 off their tax bill in the same year.

Under full expensing, companies can deduct the costs of various equipment from their tax bills, including machines from computers to lathes, office equipment such as desks and chairs, as well as vans, tractors, large construction equipment and tools.

Elsewhere, there is a pot of £4.5billion to boost manufacturing in the automotive, aerospace, life sciences and clean energy sectors, and a new policy that means from April 2024, companies bidding for large government contracts will need to demonstrate they pay invoices within an average of 55 days to "end the scourge of late payments".

Investment Zone cash

Financial incentives for Investment Zones, which aim to bring economic growth to certain areas have extended from five to 10 years. This means the pot for Aberdeen and the North-east will jump to £160million.

Sir Ian Wood, Chair of the North East Scotland Investment Zone Steering Group, said: “This is hugely welcome and will provide greater long term certainty for businesses seeking to grow and invest in our region as we seek to accelerate the diversification of our key sectors.

"We also note the announcement of a £150million Investment Opportunity Fund aligned with the Investment Zone programme and we will work closely with the UK Government to understand how this can be unlocked to support businesses as we continue to transform our economy."

Aberdeen & Grampian Chamber of Commerce chief executive Russell Borthwick, who sits on the Investment Zone steering group, added: "This great news will enable longer term thinking with the focus on accelerating energy transition and turbo-charging the region’s digital companies to develop the technologies that will support our growth sectors and economic diversification plans.

"The current focus is on achieving the right mix of flexible spend and tax incentives. The latter - across up to 600ha and three sites - can stimulate inward investment and other activity providing benefits such as a reduction of LBTT, business rates and Employers’ NI contributions plus enhanced capital allowances. Crucially, it offers the potential to retain locally 100% of any business rates growth in the designated sites above an agreed baseline for 25 years.

"The success of our City Region Deal provides the blueprint for a region that continues to demonstrate that it doesn’t need handouts but returns handsomely on investment made here."


Responding to to the Autumn Statement, Ryan Crighton, Policy Director at Aberdeen & Grampian Chamber of Commerce, said: “After far too many painful years of low growth, 110 measures to grow the economy is exactly what businesses needed to hear today. The Chancellor has read the room and delivered a package of investment incentives which will be widely welcomed.

“The Chamber network across the UK has been campaigning for full expensing to be made permanent, and we are delighted to have helped land this £11billion per year package – the biggest single business tax boost in half a century – to benefit our members in Aberdeen and Aberdeenshire, and throughout the whole country.

“Headline announcements on the doubling of the investment zone packages and almost £1billion of support for our green industries, including carbon capture, should also be good news for the North-east of Scotland – but the devil will be in the detail.

“However, for all the positives, failure to recognise the detrimental impact the Energy Profits Levy is having on the North Sea oil and gas sectors is a further blow to an industry which, following today’s announcement by PetroIneos, has shed 1,000 jobs and counting this year. The windfall tax needs to go if we are to avoid a cliff-edge end to our domestic oil and gas industry.

“Attention will now turn to the Scottish Budget next month, and there is much for here for the Scottish Government to reflect upon, not least the extension of 75% business rates relief to firms in the retail, leisure and hospitality sectors. We cannot continue to allow Scottish firms to remain at a significant competitive disadvantage against their peers South of the border and urge the Scottish finance secretary to follow suit.”

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