Britain’s manufacturers are warning of the potentially damaging consequences of a raft of increasing business costs.
Business leaders are urging the Chancellor to signal to business in the forthcoming Budget that they will not be the ‘thin end of an ever-thickening wedge’.
Publishing its Budget submission, EEF pointed to a raft of recent policy announcements which have come at a time when industry is facing significant global headwinds.
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Among the top business risks that manufacturers identified this year, rising business costs were noted as a potential concern for more than a third (36%) of manufacturers.
This is a key reason why the proportion of companies viewing the UK as a competitive place to do business has fallen from 70% in 2015, to 56% this year.
Industry’s concerns range from the introduction of the new apprenticeship levy, to the future cost and complexity of energy-related taxes.
To help offset the current crisis in the steel sector, EEF is calling on the Chancellor to remove plant and machinery from the calculation of business rates.
Amid concern about another change in pension rules, employers are also urging the Chancellor to retain the current tax treatment of employment pension contributions and avoid saddling employers with a raft of direct and unintended penalties for their continued support of workplace pensions.
EEF chief executive, Terry Scuoler commented: “While many of the risks we are facing stem from challenges in the global economy, companies are increasingly concerned about the creeping onslaught of taxes and policy decisions falling at the door of employers.
“While, on their own, individual policy decisions may not be significant, taken together they are adding significant cost at a time when business conditions are to say the least, volatile.
He continued: “With investment intentions looking more fragile, the Chancellor should plot a course that avoids piling more costs on employers and one which gives manufacturers the certainty to invest for the future.
“This means ensuring the apprenticeship levy works for sectors that have a track record of investing in their people; removing the disincentive to invest from the business rates system and avoid tinkering with pensions in a way that adds even more costs to employers.
“We are concerned that the additional costs we face after just six months of this parliament could be the thin end of an ever thickening wedge. The Chancellor should look at future tax reforms and fiscal changes within the broad context of a clear long-term strategy supporting industry.”
