Budget must promote investment and protect skills if manufacturers are to lead recovery

The Chancellor must use the forthcoming Budget to introduce targeted and short term measures on investment, skills and innovation that will enable manufacturers to prepare the ground for an eventual recovery and help deliver a more balanced economy according to the British Plastics Federation (BPF)

Publishing its submission, together with twelve other manufacturing organizations, the BPF believes that the economic environment for manufacturing is the worst for at least 30 years with output set to contract by close to 10% this year.

The need for short term measures to have an immediate impact is therefore becoming increasingly urgent. These should focus on minimising additional costs on businesses, alleviating cashflow pressures facing manufacturers and supporting vital long term investment.

Commenting, BPF Director-General Peter Davis:

‘Whilst the focus on restoring liquidity to the banking system is welcome these efforts will take time to have an effect. In the meantime, the acute pressures facing manufacturers threaten to undo the great strides made by the sector 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.’

In particular, previous changes to the tax system have created a less favourable environment for manufacturing investment.  But decisions on capital expenditure that are delayed or reversed now will have consequences for competitiveness come the upturn.  The BPF is therefore calling for a temporary increase in the annual investment allowance from £50,000 to £250,000.

‘The Chancellor has already limited the immediate rise in Business Rates to 2% instead of 5%, but this will only be available from August. Our proposal was to completely cancel the rise’ says Davis.

The BPF also re-iterated its call for measures to protect skilled employees and support companies’ efforts on short time working.

In addition, the BPF has also made the following recommendations:

•       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 levels, although the BPF believes the climate change levy should be abolished altogether
•       full use of the three year period available to implement the temporary agency workers directive
•       a clear commitment to introduce the proposed framework of Regulatory Budgets to manage the longer term flow of regulation

ENDS

For further information on this press release, please contact Anthony Roberts, British Plastics Federation, 6 Bath Place, Rivington Street, London, EC2A 3JE, tel 020 7457 5043, fax 020 7457 5045, email: [email protected]

Notes for editors:

1)     British Plastics Federation (BPF) is the UK trade association for the plastics industry – representing the whole supply chain including polymer producers, distributors, additives suppliers, machinery manufacturers, processors and recyclers.