EEF pushes Darling to focus on manufacturing in Budget

Posted on 6 Apr 2009 by The Manufacturer

EEF, the manufacturers’ organisation, has called upon Chancellor Alistair Darling to use the forthcoming Budget to introduce targeted and short term measures on investment, skills and innovation to lead UkK manufacturing out of the downturn.

The organisation pointed out in its submission that the industry is now faring its worst for over 30 years and that output is expected to drop 10% over the course of 2009.

One particular measure EEF wants to see introduced is a temporary scrappage incentive scheme for motor manufacturers. Another is a temporary change in the tax system to increase the annual investment allowance from £50,000 to £250,000.

“The Chancellor has made a good start by staggering the increase in business rates companies were facing this year,” said Steve Radley, chief economist at EEF. “In the meantime, acute pressures remain and threaten to undo the great strides made by manufacturers in recent years to improve its performance. Without further action we risk further hollowing out of the supply chain and the loss of viable companies in key sectors.

“The government must back its rhetoric on the need for a more balanced economy with firm actions targeted at supporting companies’ efforts to retain skilled employees and maintain investment.”

In addition, EEF has also made the following recommendations:

• a more flexible system of per day payments that companies can access for a proportion of their workforce, up to a maximum of 17 week

• restoration of relief on business rates on empty property

• subject to state aid rules, a temporary extension of a payable R&D tax credit to large companies engaged in low carbon innovation projects

• measures to underwrite trade credit insurance

• increases in indirect taxes such as the climate change levy and landfill tax should be postponed and held at their current level

• full use of the three year period available to implement the temporary agency workers directive