BUDGET speculation this year has played second fiddle to the debate surrounding our membership of the European Union. Obviously the decision to stay or leave is a crucial choice for the people of Yorkshire and the rest of the United Kingdom.
However, for Sky Betting & Gaming, and many other businesses in the North, I believe the Chancellor’s Budget statement is, for now at least, of greater significance than how the country will vote in June.
Much has been written about the Northern Powerhouse agenda. And these pages have often been filled with scepticism about what it all means.
My own view is that those of us in the region should welcome the additional political attention we have received.
However, it is important that the Chancellor uses the Budget to deliver practical, tangible measures to match this.
It is also vital that nothing is done to undermine companies that are already delivering on this aspect of the Government’s agenda.
So what will we be looking out for in the speech?
The first thing I want to see is for the Government to do nothing in one particular area; namely the taxation of online bookmakers.
Unlike other digital businesses that are often based overseas and move profits from one country to another, we already pay a substantial share of our profits in taxation.
Last year for instance, by some measures we paid the equivalent of 69 per cent of profit in tax. We’ve estimated that this will rise to over 80 per cent this year.
This is despite the recent falls in corporation tax and because the bulk of our bill comes from the Government’s recently introduced “point of consumption” tax. This means that, in contrast to other online sectors, we pay tax on the profit we make from our UK customers.
This is only right. But the rate of this tax, currently at 15 per cent on top of corporation tax, National Insurance and VAT, needs to be competitive enough to allow UK based businesses to invest in jobs, skills and new products. At the moment it is.
Since we became an independent company last March, we have invested around £35m in creating an additional 450 jobs, opening our Technology Hub in Sheffield, an additional office in Leeds and a new site in London for our Oddschecker business.
Maintaining these taxes at competitive rates will ensure we can continue to invest at similar levels.
Some people have concerns about the growth of online betting in this country. But betting is a highly regulated, mainstream leisure activity, and rates of problem gambling have remained static throughout the period in which online has grown.
Reasonable tax rates are something that the online betting industry and those with legitimate concerns about problem gambling can agree on: the only way that the industry can be regulated and customer behaviour monitored is if customers bet with UK licensed sites.
This is only going to happen if UK licensed sites can remain competitive, which won’t be the case if taxes are excessive.
So where would we like to see Government take action to support business? The most important long term issues requiring help and intervention are in transport and skills.
On transport, our priority would be to see projects that link our great Northern cities and reduce travel times between Manchester, Sheffield and Leeds. This would help create a single, large-scale labour market in which growing companies can better compete for talent.
This could be achieved in a number of ways.
By moving the proposed site for the Sheffield HS2 station from Meadowhall to the city centre; by giving the go ahead, and investment, for a high speed link between Manchester and Leeds; or by pushing ahead with the trans-Pennine tunnel. Any announcements on these projects would be very welcome.
Finally, on skills, I recognise that companies like ours have a responsibility to invest in the skills we need as well as in those that will benefit the wider community. That’s why I’m so pleased that our Graduate Software Academy is now open for applications.
However, we also believe there is a role for Government in this area. I’ve argued before that now is the time to end the debate on devolution and just crack on with it.
Whether there’s a Yorkshire-wide mayor, or one each for the various city regions, politicians of all sides need to end the discussion and decide. The sooner we have a devolution package that includes funding for skills and training to match private sector investment, and a mayor to champion the region, the sooner the Northern Powerhouse will become a reality.
Richard Flint is managing director of Leeds-based Sky Betting & Gaming.