What the Budget means for the North West

To help build an economy that works for the North West, the Budget announces:

A Regional Growth Fund will operate in England and support proposals from private and public-private bodies that create sustainable increases in business employment and growth.

A new three-year scheme will exempt new businesses from up to £5,000 of employer National Insurance Contributions (NICs). Any new business set up from 22 June which meets the criteria set out in the forthcoming announcement will benefit from the scheme. Up to 69,000 businesses in the North West could benefit.

The impact of the employer NICs rate rise previously announced will be largely reversed. This will lead to a saving of around £340 million in the North West.

The Budget 2009 proposal to repeal the special tax rules for furnished holiday lettings will not be implemented. Instead, the Government will consult over the summer on an alternative proposal. This will benefit an estimated 4,800 individuals in the North West who receive an income from furnished holiday lettings.

The Income Tax personal allowance for those aged under 65 will be increased by £1,000 in cash terms, taking it from £6,475 in 2010-11 to £7,475 in 2011-12. In the North West over 2.5 million basic rate taxpayers will gain by up to £170 from this measure.

The Government will increase the basic State Pension in April 2011 by the equivalent of Retail Price Index. This will benefit 1.3 million pensioners in the North West.

The Budget sets out the path that the Government will take for reducing spending over the course of this Parliament. Full details of the Spending Review, which will have implications for the North West, will be set out on 20 October.

The following statistics illustrate the current economic landscape in the North West

In the North West in the latest reported full year, 2008:

• the North West contributed £120.7bn to UK economic output. This was 9.6 per cent of the UK’s total economic output
• the average economic output per person was £17,555. This was below the UK average of £20,520
• 27,650 new businesses were started, accounting for 10.2 per cent of new business started in the UK
• the public sector employed 663,000 people, which accounted for 20.8 per cent of total employment
• the private sector employed 2.53 million people, which accounted for 79.2 per cent of total employment 

The latest labour market figures for the North West, from the three months to April 2010 show:

• that 3.12 million people aged 16 and over were in employment. This was 70.6 per cent of people in the North West aged 16 to State Pension age;
• 294,000 people aged 16 and over were unemployed. This was 8.6 per cent of all employed and unemployed people aged 16 and over in the North West.