Chancellor’s Budget fails to impress industry

Posted on 12 Mar 2008 by The Manufacturer

Alistair Darling’s 2008 Budget statement has received a less than rapturous response from UK manufacturers.

Richard Lambert’s plea for a delay in the Chancellor’s controversial capital gains tax plans appeared to have fallen upon deaf ears as the statement contained no further u-turns.

“The lack of any announcement on the future direction of business tax strategy failed to impress. The UK’s tax competitiveness is heading in the wrong direction and this still needs to be addressed if other positive measures are not to be undermined,” said EEF chairman Martin Temple.

Both EEF and the CBI criticised the lack of firm long-term climate change strategies, noting especially the concentration on consumer and household emissions rather than those of businesses; the lack of public funding for climate change research and development; and the failure to maximise on the potential opportunities a low carbon economy could afford the industrial sector.

“The Budget gives the impression that the Government has only paid lip-service to the green agenda with old initiatives implemented at a plodding pace,” said David Elwen, director of DMW IT consultancy.

Manufacturers’ organisations did, however, welcome the Chancellor’s announcements regarding the Enterprise White Paper, praising the increased share of Government procurement contracts to small- and medium-sized enterprises, the independent review of official guidance to firms, the improvement of access to finance for business and the promotion of enterprise among women.

“We welcome improved access to finance, with the removal of the five year trading restriction in the Small Firms Loan Guarantee and the injection of new capital for the current year,” said Richard Lambert, director-general of the CBI. “Small businesses will be encouraged by the measures to improve access to public procurement contracts. We also welcome the uplift in thresholds for the Enterprise Investment Scheme which should encourage more investment in growth companies.”

EEF said the Enterprise White Paper measures would “tick many boxes for manufacturers”, adding that they would “go some way towards restoring the Government’s reputation in this area,” but that clear evidence of delivery would need to be seen.

“The Chancellor didn’t set the Thames alight,” commented Lambert, “but then he didn’t have anything to set it alight with.”