The BPF Acts on Grim Economic Conditions

Speaking at the BPF’s ‘Budget Planning for 2009’ seminar in Stoke on Trent on 9th July Peter Davis, Director General of the British Plastics Federation outlined the BPF’s lobbying messages for Government in the current difficult economic conditions and the help the BPF will be giving member companies.

Peter Davis said, “I have never seen such negative economic conditions come together so fast and take us to the precipice of a serious economic slowdown.”

The Worsening Economic Climate

He highlighted: inflation in May rising to 3.3%; GDP growth likely to slow to only 1.8% this year (the slowest growth in 17 years); new housing starts to plunge to the lowest level since 1945; an 18% increase in business failures predicted this year; new car sales have fallen by 8% and the Government borrowing is out of control with £31bn more being borrowed than the Government planned.  He said that high oil prices at $142 per barrel for Brent crude were seriously impacting on plastic raw material prices and transport costs.

Peter Davis remarked, “Gordon Brown when Chancellor said he would abolish boom and bust in the economy. It certainly doesn’t seem that way!”

He said, “There are some bright prospects.  We may avoid a recession. Weak sterling greatly helps exports and liquidity between the Banks must improve as they declare all their bad debts.  More housing is needed and will oil and food prices remain so high?  Both are inflated by speculation.”

The BPF’s messages for Government and the Bank of England

Peter Davis proposed:

• Don’t increase interest rates on Thursday
• Abandon the autumn rises in fuel duty and Vehicle Excise Duty.
• Provide help for first time buyers to secure mortgages and lower Stamp Duty
• Increase support for social ownership housing schemes
• Government must remain committed to its Capital Investment Programme but cut unnecessary waste so as to get public spending under control.
• Government must speed up planning permission for modernised, nuclear capacity, natural gas storage, Energy from Waste plants and Wind Farms.

All these factors are needed to improve security of energy supply and get down costs.
Peter Davis said these urgent messages will be conveyed by the BPF to Ministers.

Advice for Plastic Industry Companies

Peter Davis stated that plastic industry companies should:

• Improve cash and billing routines
• Pay close attention to cash flow
• Practise effective cost control
• Minimise the risk of bad debts

He remarked, “This is a time of opportunity.  Innovations are spun from the need to do it better, faster and cheaper.  We need to try to maintain innovation and investment for that competitive edge.”

Peter Davis said that the BPF would be holding more seminars like ‘Budget Planning for 2009’ to give companies expert help.

Energy Costs

Eligible companies should register for the BPF’s proposed Climate Change Agreement which would give an 80% rebate on the Climate Change Levy.

The BPF will be stepping up seminars and website information on achieving greater energy efficiency and companies should look into the BPF/Inenco Bulk Energy Purchase scheme.

Exporting

Peter Davis urged plastic companies to look for opportunities in developing markets overseas. Weak sterling gives an advantage.

The BPF has an ‘Exporters Toolbox’ full of information and will be taking plastics companies next year to Plastic exhibitions in India, Poland and China.

www.bpf.co.uk

End . . .

For further information on this press release, please contact Philip Batten, British Plastics Federation, 6 Bath Place, Rivington Street, London, EC2A 3JE, tel 020 7457 5000, 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