Industry urges government to step up ambitions for growth in Budget
07 March 2012
The Engineering Employers' Federation (EEF), representing Britain's manufacturers, has urged the government to step up its growth ambitions in the forthcoming Budget. It should do this by setting out its vision for a rebalanced economy, backed up by a set of indicators which would measure its progress. These priorities must also drive policy and spending decisions over the remainder of this parliament.
EEF also called for immediate measures to help industry deliver the 8% rise in investment on which the government is relying to deliver 90% of the growth in our economy this year. Priorities include a two year temporary increase in capital allowances to 100% and ensuring that its new National Loan Guarantee Scheme which is designed to reduce the cost of credit is widely available and accessible to business.
The call was made by EEF, the manufacturers’ organisation in its Budget submission, which it will launch at its National Manufacturing Conference. The conference will debate what needs to be done to make Britain the location of choice for manufacturers and will be addressed by the Business Secretary and the Leader of the Opposition. Later today EEF will also repeat its call to the Chancellor of the Exchequer who will address guests at its manufacturers’ dinner.
Commenting, EEF chief executive, Terry Scuoler (pictured), said: “The Chancellor must use his Budget statement to send out a clear signal to business that now is the time to be increasing investment and that Britain is the place to do it. He should now spell out his ambitions for the economy and his plan for creating the business environment that will help achieve it.
“The government has a clear plan for reducing its deficit. It needs to match that with clearly articulated ambitions for the economy that provide clarity for business about where the government will focus its resources for the rest of this parliament. These ambitions must have the same clout across Whitehall as the fiscal mandate.
“The Budget should also bring forward immediate measures that will help business to deliver the large increase in investment on which the government is banking to deliver growth this year. These include a temporary increase in capital allowances to aid cashflow and ensuring that the National Loan Guarantee Scheme is widely available and accessible to business.”
In its submission, EEF reiterated its support for the government’s deficit reduction programme but called for it to be matched with clearly articulated ambitions for growth that provide clarity to business and, has the same clout across Whitehall. EEF is calling on the government to focus on four key aims and measures of success:
· More companies bringing new products and services to market
· More globally-focused companies choosing to expand in the UK
· A lower cost of doing business in the UK
· A more productive and more flexible labour force
These would have measurable deliverables and should be monitored by the National Audit Office. For example, under the cost of doing business by 2015 Britain should have below average EU industrial electricity prices, the most competitive tax system in the G20 and should see a net reduction of 10% in the burden of complying with domestic regulation.
EEF’s Budget priorities include:
· Introducing a two year temporary increase in the value of capital allowances.
· Ensuring that the National Loan Guarantee Scheme is pushed strongly through participating banks’ networks.
· Using its Business Finance Partnership to provide supply chain growth capital.
· Extending the Enterprise Scheme to cover debt instruments.
· Introducing a Regulatory Burden Target.
· Removing the Carbon Price Floor by 2015 and avoiding increasing the Carbon Price Support in this Budget to compensate for weakness in the EU carbon market.
· Reducing the employer national insurance contribution rate by 1% for employers taking on new employees aged 18-24.
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