The Manufacturer provides a full round up of comment from top industry figures on today’s Autumn Statement.
Director of communications at Food and Drink Federation (FDF), Terry Jones said: “At first glance this looks like a pro-business statement with a clear focus on growth. SMEs have repeatedly highlighted concerns about accessing finance so we are pleased to hear the proposals for credit easing that should enable many of our small businesses to expand, pursue new export markets and create jobs.”
Mr Jones continued: “The move to remove unnecessary red tape is welcomed by the industry as we await more details. Our members have been particularly concerned about increasing regulation on employment, so plans to exempt small employers could give them the confidence to create new jobs. We are already pushed to the hilt on commodity prices and escalating energy charges so the freeze on fuel duty will ease difficult operating conditions for the industry.”
On changes to the R&D Tax Credit, Ms Lee Hopley, chief economist at EEF, the manufacturer’s organisation, said: “Making R&D tax credits payable the line is a smart reform without a big price tag. It will send a powerful signal that government intends to make the UK the number one choice for R&D investment and is another step on the road to making the UK to the most competitive tax system in the G20.”
“This reform will strengthen the link between the credit and the R&D function and make it more valuable to R&D decision makers. It will have a positive impact on investment decisions across a range of companies and support rebalancing growth towards high value investment in innovation and jobs.”
On support for Energy Intensive Industries, EEF chief executive, Terry Scuoler, said: “This package is welcome recognition of the significant competitive pressures facing energy intensive companies and should go a long way to address them. Government must build on this by sending a signal to companies looking to invest here that it will maintain this package beyond the current spending review period.
“The government must also work closely with Industry to address the competitiveness issues that electricity market reforms will raise once it has decided how to move forward with them.”
“Increasing the value of climate change agreements and providing funding for energy efficiency through the Green Investment Bank is also a welcome first step in helping a wider range of manufacturers to make the investments that will deliver a low carbon economy.”
Much of the Autumn Statement focused upon providing incentives for small businesses. The Federation of Small Businesses (FSB) welcomed the Chancellor’s Autumn Statement saying that it is a step in the right direction to help small firms.
The FSB listed the government’s enhanced seed enterprise investment scheme, which will offer greater reliefs on capital gains and income tax for people investing in small businesses, as a measure which will benefit small firms. This will give start-ups and fledgling businesses the chance to by-pass the high street banks and find alternative sources of finance.
John Walker, national chairman for the FSB, said: “The key now is for the Government to be consistent, and set to the task of translating these policy intentions into tangible actions on the ground. Targeting the rising cost of overheads is imperative to help firms weather the economic storm that could be heading our way, so measures to limit the rise in fuel prices and business rates are very welcome.”
He added: “small businesses are struggling to access finance and so the enterprise investment scheme will open up new sources of finance for new and growing businesses. We hope that the banks will pass on the lower interest rates to small businesses and that more finance will be available.”
However, while employer representatives were positive about the Chancellor’s statement today, Union representatives issued a different tone in their comments.
Unite general secretary, Len McCluskey said: “George Osborne is like a pilot, who has put his plane into a tailspin, and is now wrestling desperately with the controls as the aircraft rapidly loses height.
“Now George Osborne is scrabbling around to put together a semblance of a programme to inject much-needed demand and spending power into the beleaguered economy that has been brought to its knees by his hardline austerity measures – but there are serious flaws in the new proposals. His much-vaunted capital projects will be paid for from the wages of working people who are being squeezed and squeezed again, as they driven into desperate financial straits. The City has got off again scot-free.”
From that City perspective, financial services firms generally welcomed Mr Osborne’s framework for future growth in relation to industrial strategy. David Raistrick, UK and Switzerland manufacturing leader at Deloitte said that protection for companies vulnerable to “carbon leakage” would be of great help to industry and also welcomed proposals for alteration to R&D credits for great invesment incentives. However, Mr Raistrick cautioned that the: “fervent [manufacturing] workforce is under threat if the Government does not invest in further developing our skilled talent.”
Accountancy firm Grant Thornton, which has just taken over part of the contract to deliver the newly consolidated National Manufacturing Advisory Service focused on the changes to R&D. Samantha Vanags, R&D tax partner at Grant Thornton said: “Broadly these changes [to R&D tax credits] will make the incentives more generous.
“The government is already committed to providing 225% relief to SMEs from 1 April 2012 and now they plan to bring in an ‘above the line credit’ for large corporates who are making tax losses. Although all the detail isn’t yet available, it now looks likely that there will be immediate cashflow benefits to loss-making corporates who are involved with technological innovation.”