This week’s Budget statement must give priority to measures which will boost growth and productivity with targeted measures on infrastructure, skills and business taxation according to Britain’s manufacturers.
Making the call, EEF supports the need for fiscal consolidation but warned that by ring-fencing Budgets for some departments the government has unnecessarily tied its hands.
Instead, EEF is urging the Government to use the current economic growth to carry on backing the successful industrial policy of recent years. This means continuing to support initiatives on technological innovation, boosting apprenticeships and delivering on major infrastructure programmes, from road improvements to a new runway at Heathrow.
EEF recently published a survey showing this supportive approach has paid dividends with a third of companies viewing the UK as a more competitive place to invest in than two years ago.
Commenting, EEF chief executive, Terry Scuoler, said: “The challenge for this Government is to take the economy from recovery to sustainable growth.
“That requires stable policy with an eye to building the skills, infrastructure and technological innovation which will allow internationally competitive, high productivity companies to succeed in the UK.
“Manufacturing will be critical in tackling the UK’s productivity and skills gaps and the government will continue to need an overall industrial strategy aimed at rebalancing the economy. If there must be spending ringfences, the government should draw them as tightly as possible, and maintain strong pressure for reform within those departments.
“Instead of an across-the-board tariff cut for all unprotected departments, this week’s announcement should prioritise reforms to business taxation and investment in future technology, infrastructure, skills and other contributors to productivity growth.”
In its submission, EEF made the following recommendations:
- Government to set out a roadmap for the development of business taxation to 2020
- Ensuring a tax system that encourages investment in future productive capacity, including reforming capital allowances to ensure they mirror actual depreciation, restoring buildings investment allowances.
- Extending the Annual Investment Allowance from 1 January 2016 at £250,000, and removing investment in plant and machinery from business rates valuations.
- Protection of the successful R&D tax credit
- Continued commitment to the full implementation of the Energy Intensive Industries Package, as agreed by the previous government, and the commencement of discussions for post 2019/20 measures.
- Maintain the pipeline of infrastructure projects already identified in the Road Investment Strategy and local growth deals.
- Enable local authorities to protect local roads spending.
- Maintain spending on skills and training that are of value to business, and stick to the previously announced plan of channelling skills funding though employer-directed vouchers.
- Maintain Defence spending at a credible level to protect the international security on which British trade depends.
- Maintain export support, especially for new entrants to growing markets and expand UKEF’s focus beyond supporting individual transactions to provide more campaign-based support that enables companies to grow their businesses in new markets.