Budget 2009 reactions

Posted on 22 Apr 2009 by The Manufacturer

A mixed bag of budget reactions from some of manufacturing's largest reps...

Comments from trade organisations including EEF, SBAC, FDF, FSB and British Gas from the private sector.

Federation of Small Businesses

John Wright, FSB National Chairman:

“We are very disappointed that this budget will do nothing for those firms which are doing their best to hold on to their valued employees. A Government funded wage subsidy for short-time working would have been a real help but was totally ignored.

“Small firms will also be disappointed not to have received the benefit of automatic rate relief. This will have boosted small businesses to the tune of £400m.

“We welcome the fact that Capital Allowances for firms investing more than £50,000 will double to 40 per cent.

The Society of British Aerospace Companies (SBAC)

Ian Godden, SBAC Chief Executive:

“Today’s Budget did not do enough to support the manufacturing success story that is the aerospace and defence sector. Our success appears to count against us.

“The Chancellor stated that he would like to use exports in the recovering global economy to boost Britain. However, the opportunity that aerospace and defence provides for exports is not fully exploited and resourced for maximum effect.

“We were disappointed that neither the overall defence budget or defence research and technology funding specifically were boosted in today’s speech. The Government has increased its overseas commitments without a real-terms rise in defence spending that today is half the level it was twenty years ago. This decline in funding is storing up future problems for our troops and our industrial base and it should have been addressed today.”

“The aerospace and defence industry employs highly-skilled people across all regions of the UK in jobs that pay well above the national average. We provide a large number of apprenticeships and employ a large proportion of the UK’s science, engineering and maths graduates. Today’s announcement on more higher education places is therefore very welcome.”

Freight Transport Association

James Hookham, policy director for FTA:

“The logistics sector is the lifeblood of the UK economy, and rather than the transfusion we need, Alistair Darling has turned Dracula. Insolvency in the logistics sector has doubled in the last year and the number of HGV drivers looking for work has almost quadrupled. What more evidence does the Government need that parts of the sector are on their knees?”

EEF, the manufacturers’ organisation

Gilbert Toppin, chief executive of EEF:

“Given the most difficult economic conditions for a generation, the Chancellor has gone some way towards alleviating the short term pressures facing companies. The measures on investment, trade credit, low carbon technologies and car scrappage are helpful though he should have gone further to make a real difference. However, the growth forecasts look overly optimistic and there is a serious danger that business will pay the price in higher tax if growth falls short.”

EEF chief economist, Steve Radley, added:

“With today’s figures showing manufacturing job losses accelerating, it is disappointing that government has not felt able to back companies’ efforts to avoid redundancies, especially given the help available in other countries. This risks loss of more key skills than is necessary and hamper companies’ efforts to take advantage of the upturn.”

The Association of the British Pharmaceutical Industry

Dr Richard Barker, director-general of ABPI:

“We welcome Government’s resolve to create winning strategies for key industrial sectors, with life sciences being one of these. Work continues with the OLS to address other dimensions of the UK’s competitiveness in this key knowledge-based sector. The ABPI will play a full part in the consultation announced today.”

Food and Drink Federation

Melanie Leech, director general of the FDF:

“The Chancellor has been brave in committing the Government to the concept of carbon budgets in today’s Statement. But there was little detail, which is all the more surprising given the urgent need for Government to engage with industry partners to discuss practical ways of meeting what are very ambitious targets.

“We welcome the targeted fiscal initiatives announced in the Budget today ¬– particularly the Chancellor’s promise to support a top-up trade credit insurance scheme, ending months of uncertainty about an issue that has become a massive headache for companies of all sizes in our sector. But other aspects of the Chancellor’s budget – notably his decision to increase fuel duty by 2 pence per litre in September – will do little to improve our competitive position.

“Overall, we are disappointed that the Chancellor appears to have ignored the strategic importance of one of the UK’s most successful manufacturing sectors. Our members will play a vital role in ensuring that the UK economy is diverse, flexible and resilient – in today’s challenging economic times and tomorrow’s low-carbon future, where food security will be an ever more pressing issue.”

From the corporate sector, British Gas Business welcomed the Budgets measures that helped small business meet energy costs. Kanat Emiroglu, director of small business at British Gas Business, said:

“We welcome this initiative which goes right to the heart of the problem small business face in trying to cut their energy usage – research amongst our 750,000 small business customers highlights found that cost was the biggest deterrent to them taking action to become more energy efficient.

We hope this additional funding will provide help to struggling small businesses and also deliver long term energy cost savings. We expect to see a demonstrable increase in energy efficiency action as a result of this development.”