Chancellor delivers on his word for manufacturers – EEF full comment on the Budget
Commenting on the Budget Statement today, Terry Scuoler, chief executive of EEF, the manufacturers’ organisation, said: “The Chancellor said this would be a Budget for manufacturers and he has delivered on his word. The Government clearly recognises the need to make the competitiveness of the UK a priority. We argued strongly for the need to reduce the rising cost of energy faced by many companies, and he’s acted on that. Taken together with measures to boost investment, exports and skills, the Chancellor deserves a pat on the back. We have always said that to achieve a resilient recovery Government must back manufacturing and we’ve seen that from this Budget.
“We now have some of the building blocks in place which will help rebalance the economy. But, as the Chancellor suggests, there’s still more work to be done. We now need to take steps which will lead to longer term solutions beyond current spending and electoral cycles. This will finally give business the predictability and certainty to encourage the successive rounds of investment our economy needs.”
1. Commenting on the Carbon Price Floor and other energy announcements where EEF has led the campaign, Gareth Stace, head of Climate and Environment Policy at EEF, the manufacturers’ organisation, said: “Today’s announcements are enormously welcome. The Chancellor has backed his words on the importance of manufacturing in rebalancing the economy and tackling climate change in a cost effective manner with concrete action. This sends a clear signal that government recognises the serious competitiveness issues at stake from rising energy prices.
“The freezing of the Carbon Price Floor will translate into greater clarity for manufacturers’ energy bills through to 2020 and provide much needed investment certainty. The Renewables Obligation compensation for energy intensive industries will also help to level the level playing field these companies need to compete effectively with others around the globe and, keep production here in the UK.”
2. Commenting on the changes to the Annual Investment Allowance, EEF Chief Economist, Ms Lee Hopley, said: “Doubling the investment allowance will offer a big boost to spending on modern plant and machinery. It will capture more of manufacturers’ investment on new equipment and technology which are key to a shift in our productivity performance. The OBR’s estimates that this could pull forward £1bn of investment highlight the significance of the move.
“Getting investment going now is critical, but sustaining that is vital too. To build an internationally competitive system when these temporary measures expire needs a comprehensive review of the capital allowances regime.”
3. Commenting on apprenticeship funding, EEF head of Employment and Skills Policy, Tim Thomas, said: “Apprenticeships are an ideal gateway for a young person pursuing a career in manufacturing. The extension of the apprenticeship grant for employers will encourage more businesses to offer such opportunities.
“Additional funding for apprenticeships up to postgraduate level will support manufacturers to access the higher level skills needed to fulfil their ambitions to launch new products and services and tap into new markets. Employers are best placed to design and develop these to ensure they reflect the needs of industry.”
4. Commenting on changes to the R&D Tax Credit, EEF chief economist, Ms Lee Hopley, said: “The Treasury has used all the flexibility it has under EU rules to support a more generous R&D tax credit for small loss making companies. It might be a small step, but it is a welcome and important one for SMEs relying on their development of new products and services to generate growth and jobs.”
5. Commenting on reform of UKEF to boost exports, EEF Lee said: “Meeting the Chancellor’s ambitions on exporting, while challenging, are critical for sustainable growth. A number of changes announced today should support an evolution of UKEF into a business responsive agency supporting a broad spectrum of exporting activity through the supply chain. So long as there are concerted efforts to promote these actions this presents a win for exporters.”