Engineering employers and the machine tool sector expressed frustration and disappointment at the lack of incentive in the Budget for companies to invest in new high-tech manufacturing technology.
While the Chancellor replaced the existing 40% capital allowance in the first year on new investment in plant and machinery with a permanent first-year allowance at the same level, the Engineering Employers’ Federation and the Machine Tool Technologies Association both said this did not go far enough.
They welcomed the 100% allowance in the first year granted in the Budget for investments in e-commerce and IT but said the Chancellor had missed a chance to extend this to manufacturing technology – much of which is computer controlled.
`We would have liked the incentives to cover manufacturing investment to have gone much further,’ said Martin Temple, director-general of the EEF.
MTTA president Mike Legg expressed frustration that the pleas of the manufacturing sector had been ignored: `We, together with the CBI, IOD, EEF and many other representatives of manufacturing, were united in our call for 100% first-year allowances for smaller enterprises.’
He said the Budget’s measures would not be enough to kick-start investment in wealth-creating plant from the present very low levels, or help hard-hit British exporters struggling to compete in the global economy. Legg said he found this surprising in the light of the recent sell-off of Rover by BMW.
`This was meant to be a Budget for business and enterprise, but it has totally failed to address the serious problems faced by manufacturing due to the high level of sterling and the many years of underinvestment, as seen in the DTI’s own CAPEX report.’