Today will see what could be George Osborne’s last budget as Chancellor, with UK manufacturers calling for a focus on solid growth measures rather than merely pre-election vote-baiting.
EEF has urged the Chancellor to use the last budget of this Parliament to focus on measures which will continue to have a measurable impact on sustaining and underpinning economic growth.
Among others, the trade organisation is calling for the compensation package for energy intensive industries to be brought forward to offset the crippling cost of energy – which is a competitive threat and undermines UK industries such as steel-making.
EEF is also hoping to hear support from Osborne regarding a scheme that puts employers in the driving seat when it comes to the training and funding of apprenticeships.
It has long-called for a step-change in the way apprenticeships are funded and is recommending the introduction of a voucher model which would allow employers to purchase training from providers.
In addition, EEF is calling for an extension of the Annual Investment Allowance as part of a wider review of capital allowances, together with measures to encourage more companies, especially SMEs, to make use of research and development tax credits.
According to the CBI, making the Annual Investment Allowance (AIA) permanent at £250,000 would boost capital spending in plant and machinery; costing £670m in 2016/17 before rising to £754m by 2019/20.
EEF chief executive, Terry Scuoler comments: “The outlook for the economy remains positive and manufacturers want to see a continuation of what has worked well in support of industry, from industrial strategies to a stable and predictable tax regime.
“While we have a long way to go to achieve a better-balanced economy, in his final Budget of this Parliament the Chancellor can still do a great deal to underpin growth across manufacturing and industries which are critical to long term growth.
“Bringing forward critical compensation for energy intensive industries will send a very positive message to key industries and any further support to efforts to boost exports and investment will be equally welcome.”
Adding his support, CBI director general, John Cridland has also said: ““Although the economic recovery is well-rooted and bearing fruit, we still need a Budget that locks-in the successes from this Parliament and spends funds wisely on those areas which will keep growth on track.
“This is a good opportunity for the Chancellor before the election to support growth and investment well beyond the Election, providing stability, certainty and simplicity for the UK’s [medium-sized businesses] to get themselves on the front foot.
“So the Chancellor must reward growing, ambitious firms with the tools to get on with the job of rebalancing the economy and lift productivity. There has been good progress on this front from the Government, and the Chancellor can now take further action to boost investment and innovation.”
Osborne has said that there will be no “giveaways” or “gimmicks” in this year’s speech. The Chancellor is likely to unveil plans to do away with the yearly paper tax return in favour of digital records. Osborn is also expected to introduce pension reforms, reveal a £1bn plan to build the world’s first tidal lagoon in Swansea to generate green energy and maintain Government’s commitment to science and innovation.
An unexpected drop in inflation has produced a £6bn windfall through lower interest payments and a decrease in the annual up-rating of welfare.
The chancellor told the BBC: “This Budget is all about securing a truly national recovery from building a Northern powerhouse, connecting up other regions of our country, committing to long-term plans that support science and high-speed transport… so no giveaways, no gimmicks a Budget for the long term.”