Pre Budget Report

Posted on 9 Dec 2009 by The Manufacturer

Key industry figures respond to Darling's 2009 PBR, delivered to the Commons today...

Chancellor Alistair Darling today delivered the lesser of his two annual Budgets; the Pre Budget Report. The following is reaction from key industry figures. Add your thoughts in the comments box below.

David Raistrick, UK manufacturing industry leader at Deloitte:

“UK boiler manufacturers will welcome the household boiler scrappage scheme. The UK is a major manufacturer and designer of gas boilers and is the largest gas boiler market in Europe. The car scrappage scheme has been a great success for stimulating the automotive sector, and if this scheme follows the same model we should see a boost to manufacturers.

“Home owners and the environment will also benefit greatly from the scheme. Domestic heating in the UK is a significant source of emissions, with boilers accounting for approximately 60% of these emissions. This scheme will accelerate the boiler replacement cycle and we will see the number of more energy efficient boilers increase and our emissions decrease.

“Further, UK home owners win as the cost of their new boilers will be subsidised and their subsequent bills will significantly reduce.”

John Wright, FSB National Chairman:

Enterprise Finance Guarantee:

“Extending the Enterprise Finance Guarantee scheme, which we called for last year and has seen more than £600 million lent out to just over 6,000 businesses, is a welcome move, although we wanted to see the scheme extended indefinitely and promoted further to help small firms get much-needed access to finance.

“The Government has missed a chance to really tackle a difficult credit market by failing to create more options for access to finance, and more competition among high street banks. The Government should have addressed this challenge and looked at options such as a regional stock exchange to help small and fast growing businesses capture finance.”


“Holding off the planned 1p rise in small companies’ Corporation Tax is a victory for the FSB and will give small companies a real helping hand, giving them the chance to expand and invest, and to grow out of the recession with confidence. In the FSB-ICM ‘Voice of Small Business’ Annual Survey, 26 per cent said a cut on this business tax would improve their economic prospects. It will also save small firms more than £300 million over the next year and give them more of a chance to take on new staff.

“Lowering tax to 10 per cent on all profits derived from patents is good news for innovative businesses and will encourage entrepreneurialism.”


“Raising National Insurance by a half of one per cent in 2011 is an attack on jobs and shows a real lack of vision from the Government on tackling the key challenge of rising unemployment. In a survey of FSB members this year, 44 per cent said a cut in payroll taxes would help them take on more staff, so this is extremely damaging for employment in the UK. While unemployment continues to rise, it is unaccountable that the Government hasn’t considered a new approach, such as a National Insurance rebate for new jobs in small firms. This pre-budge report should have encouraged and rewarded job creation in 2010, rather than imposed this tax.”

Martin Wright, chief executive of the North West Aerospace Alliance:

“The pre budget statement appeared something of a damp squib with few surprises and little in terms of real help for the UK’s key economic sectors.

“True, advanced engineering including aerospace was given a brief mention and the Innovation Investment fund will benefit from £100 millions of re-directed funding for low carbon projects, but this is small given the acknowledgement that the UK is number two in the world in aerospace with only the US ahead.

“The highlights for the industry are mainly indirect but include a £500 million capital growth fund for SMEs to be established with support from the banks; the 500 million Government loan guarantee for SMEs extended; and corporation tax rises deferred.

“Measures to support 10,000 graduates from under privileged backgrounds to get into industry is interesting but we will await the detail. There was nothing committed to advanced skills which the aerospace industry needs badly.

“£2.5 billion has been earmarked for operations in Afghanistan with no detail and the commitment to superfast broadband through a landline tax will be good for all industry, particularly SMEs.

“The commitment to cutting quangos and replacing them with private sector operations may be aimed at Regional Development Agencies such as the NWDA but again there are no details.

“Whilst acknowledging aerospace as a key industry the Government in this statement has mainly kept to support in words only. There were no big shocks or brave decisions so a general election must be due.”

SMMT chief executive, Paul Everitt:

“2010 is set to be another extremely difficult year for the UK motor industry as increased VAT and first year VED rates directly impact on consumer demand. The opportunity is to take advantage of the transition to low carbon vehicles, with new incentives for company car drivers and van buyers, as well as extra resources for collaborative research and development.”

EEF, the manufacturers’ organisation

Steve Radley, director of policy:

“The job of today’s statement was to outline how the structural shortfall in the public finances was going to be tackled. Instead it went for the easy targets and fudged the tough decisions necessary to achieve this.

“We also needed to see tangible action to begin re-balancing our economy. However there were only limited measures which are unlikely to drive broad-based growth.

“Whilst there are some helpful measures such as deferring the increase in corporation tax for small firms, the failure to extend capital allowances for investment removes support at just the time in the cycle when firms could most benefit.

“Business will now be faced with a further six months of uncertainty as to how the Chancellor plans to tackle the deficit.”

On the increase in National Insurance Steve Radley, said:

“Given the increase already in the pipeline, this measure is a further tax on employment which will do little to help employers create jobs just as the recovery will be gaining pace.”

On Public Sector pensions, EEF Head of Employment Policy, David Yeandle, said:

“Whilst the government has made a good start on the reform of public sector pensions, today’s measures fall short of the fundamental reform which was needed.”

On Innovation Senior Economist, Jeegar Kakkad, said:

“While incentives to boost investment in biotech and pharmaceuticals are helpful, the narrow focus on intellectual patents is puzzling. Patents are only a small part of the UK’s broad innovative activity. Changes to their tax treatment would benefit only a limited set of companies at the expense of a broader-based rebalancing of our economy.”

On the National Investment Corporation – Chief Economist, Lee Hopley, said:

“A new Capital Growth Fund investing in growing businesses could help begin the process of rebalancing our economy. For innovative, fast growing manufacturers, the current banking system had become unfit for purpose.”
“The current situation provides the ideal opportunity to take stock and reform the financial architecture of the banking system. But details on the ultimate scale and delivery of the funds to business will determine whether the Fund will succeed where too many government schemes have failed.”

On Climate Change Agreements, EEF Head of Climate & Environment Policy, Gareth Stace, said:

“EEF is disappointed that the Chancellor reduced the rebate incentive within the current Climate Change Agreements from 80% to 65%. Instead of encouraging business to invest in reducing carbon emissions, as the current approach does, he opted to take away one of the key incentives that encourages industry to make those investments. This will hit the most energy intensive sectors which already are paying higher energy costs than many of their competitors.”

Unite joint general secretary Tony Woodley:

“The tax on bankers is welcome and must now mark the beginnings of a fairer tax regime. The recession is not over even if the bankers that caused the crisis act like it is.

“The chancellor must resist scaremongering from the city over ‘brain drain’ , with unemployment set to rise, this is a time to put jobs and families first. Public sector workers should not have to pay the price for the economic crisis caused by casino capitalism. We oppose a cap on public sector pay but the Tories would freeze pay now and make brutal cuts to public services.

“Measures to keep people in their homes, rebalance our economy and stimulate job creation are exactly what is needed as we face a hard year ahead. Those who can afford to contribute more, the high rollers who are preparing to pop their corks at bonus time, must play their part in paying down the debts they caused.

“When it comes to a choice at the next election voters will reflect on who acted to save jobs, protect our services and build a fairer future for Britain. Labour must stick to its guns and defend what is just and right for the vast majority, not the excessively privileged few.”

Andrew Kuyk, Food and Drink Federation’s Sustainability Director:

“We are surprised at the changes announced today to the Climate Change Agreements that the Chancellor himself acknowledges are an effective way of reducing carbon emissions in industries which are high users of energy, including the food and drink manufacturing sector.

“It would appear that he plans to cut the discount available under these Agreements from 80% to 65% for all fuels from 2011. If that is indeed the case, this decision would be very unwelcome. It would mean that companies would have less money to invest in reducing their carbon emissions, which would seem to be at odds with the Government’s claim to be supporting low-carbon economic growth with this Pre-Budget Report.

“The decision is all the more disappointing given the fact that today the Food and Drink Federation has published a new report2 showing how our members have worked to reduce their carbon emissions by 19% since 1990, the equivalent of almost one million tonnes.

“As the voice of the UK’s largest manufacturing sector, we will be seeking urgent talks with Government to seek clarification on this issue.”