Terry Scuoler, chief executive of EEF, urges manufacturers to voice their Budget concerns at the National Manufacturing Conference and describes what the manufacturer’s organisation has already called for.
In just a few weeks, the Government will set out its latest thoughts on the economy and measures to encourage stronger growth. I strongly recommend that the Chancellor picks up the messages from industry at the first EEF national conference and responds to them in his Budget announcements.
One of the most positive measures that the government could take would be to temporarily increase capital allowances to 100%. This would provide an immediate boost to cash flow and send a clear signal to firms that they should invest now to maintain their competitive positions. Past experience shows that modest moves in allowances make very little difference.
“One of the most positive measures that the government could take would be to temporarily increase capital allowances to 100%” – Terry Scuoler, Chief Executive of the EEF
Looking beyond immediate measures, the Government needs to do a lot more to spell out its ambitions for the UK economy. In doing so, it should look to its own Fiscal Mandate. This sets out clearly the government’s aims for reducing its level of borrowing and debt. Our economy has benefited from this clarity and industry now needs to see a similarly strong and focused strategy for growth.
We believe that government should focus on four key ambitions for our economy: more companies bringing new products and services to market; more globallyfocussed companies expanding in the UK; a lower cost of doing business in the UK, and a more productive, more flexible labour force.
The overriding importance of achieving these objectives should drive the government’s programme for reforming our economy, prioritising areas where our business environment needs most improvement, such as taxation, access to finance, regulation, skills and infrastructure.
Government needs to judge whether its existing or planned policies are consistent with these objectives. Will its approach to climate change help to deliver competitive energy prices and reduce the cost of doing business? Will its policy on migration help to provide industry with the skilled flexible labour force it needs?
None of this will be easy but only when it is done will the Chancellor’s reference in last year’s Budget to the ‘March of the Makers’ become a reality.