Industry reaction to Budget

Chancellor George Osborne has delivered his fifth Budget which included measures aimed at benefitting business and manufacturing.

Billed as the Budget for the ‘maker, doer and saver’, Osborne announced a scheme to boost exports, doubling the amount of finance available to £3bn. He also increased the investment allowance from  £250,000 to £500,000 and extended it to the end of 2015. In addition he announced there will be no national insurance for the young as well as a £7bn cut from energy bills for manufacturers.

John Cridland, CBI director-general, said: “The Budget will put wind in the sails of business investment, especially for manufacturers.

“This was a make or break budget coming at a critical time in the recovery and the Chancellor has focussed his firepower on areas that have the potential to lock in growth.

“The CBI has pushed hard for this significant and much-needed energy package that will help keep manufacturing jobs in the UK, while underpinning vital investment in new energy.

“The doubling and extension of the Annual Investment Allowance, together with making the seed enterprise investment scheme permanent, will be a shot in the arm for many medium-sized businesses."

The chemical industry has backed measures announced by the chancellor to reduce energy bills for manufacturers.

Chief executive of the Chemical Industries Association, Steve Elliott said: “We have long-campaigned for our companies to be supported to drive economic growth and the transition to a low carbon future.”

The measures are:

·         capping the Carbon Price Support rate at £18 per ton of CO2 from 2016-17 for the rest of the decade.

·         extending the existing compensation scheme for energy intensive industries for a further four years to 2019-20.

·         protecting energy intensive manufacturers from the rising costs of the Renewable Obligation and the Feed-In Tariffs and

·         exempting from the carbon price floor the electricity from Combined Heat and Power plants are a step towards making that happen.

“The positive announcements on capital investment allowances, apprenticeships, R&D tax credits and export support offer further encouragement,” added Elliot.

“I am grateful to MPs of all parties who have campaigned with us to secure these measures from government. There is still much to do, both here in the UK and across the European Union, if we are to truly compete with America and other leading economies in the years ahead. Today’s announcements are, though, a good start."

Peter Davis, director-general of the BPF said: "This is a good budget for manufacturing.  In the BPF-led Seven Associations letter to the chancellor in February we asked him to extend the £250k tax free allowance to upgrade equipment and expand production. In fact he has doubled it to £500k until December 2015.  This will boost investment and productivity in the plastics industry”.

Davis also welcomed the chancellor’s doubling of UK export finance’s direct lending programme to £3bn and to be more proactive in stimulating export. 

“This will greatly help SMEs particularly to start exporting. Our trade deficit in goods was £106bn in 2012.  We must reverse that," he said.

Davis commented on the chancellor's capping of the Carbon Price Support Rate from 2016-17 to 2019-20. He said: “Capping the rate and extending the compensation scheme for energy intensive industries such as chemicals should benefit the plastics industry in stabile or lower prices for the raw materials and additives they purchase."