Manufacturers are calling on Chancellor to use tomorrow’s a Budget statement to support the government’s new focus on the industrial sector.
Last week, the government made clear its growing interest in developing a new industrial strategy for the UK.
This marked a change of emphasis for the government which has in the past tended to focus in the IT and services sectors as the only drivers of industrial growth.
This change has been welcomed by manufacturer’s organisation, the EEF.
But the EEF warned that the government’s industrial plans should not be undermined by tax changes in the Budget.
“Business will welcome this clear intention to deliver more balanced and sustainable economic growth with an active strategy to support Britain’s industrial base,” said EEF Chief Economist, Steve Radley.
“This must be complemented by the measures announced in Wednesday’s Budget, not undermined with future tax rises,” said Radley.
This comes at a difficult time for the manufacturing sector which is being hard-hit by the global downturn.
The EEF’s own figures indicate a sharp contraction in manufacturing output this year, of around 11%. But the EEF also thinks the worst is now over.
There is a belief that this week’s Budget should focus on helping manufacturers prepare for the upturn by supporting investment in modern machinery and innovation.
Specifically this could be supported by a temporary increase in the Annual Investment Allowance from £50,000 to £250,000 and a temporary extension of the payable R&D tax credit to large companies engaged in low-carbon innovation projects.
Manufacturers are looking for a strong signal about how government policy intends to deliver a broader base for industrial growth across the economy.
“Manufacturers are preparing for the upturn and are looking for the Budget to provide forward-looking and positive measures to help them cement their competitive position for the future and a framework for how it will support them to achieve this,” said Radley.
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