Britain’s leading manufacturing trade bodies have joined together in an attempt to convince the Chancellor to adopt measures to improve investment, boost research and development and hold down the value of the pound.
The Engineering Employers’ Federation is leading the joint submission from 22 trade bodies in preparation for the Chancellor’s pre-budget statement on 9 November.
This is the second year that there has been a joint budget submission from the manufacturing industry. Its trade bodies have been stepping up joint campaigning as the fortunes of the UK’s service and manufacturing sectors have diverged.
Policies aimed at reducing consumer spending and preventing the service sector overheating have resulted in a strong pound and excessively high interest rates, which have hit export driven manufacturers.
The industry group warns that although Britain has avoided outright recession manufacturing is suffering disproportionately to the rest of the economy.
The submission says that fiscal measures, such as the proposed energy tax, will hit manufacturers while benefiting the more labour intensive service sector.
The emergence of a two-speed economy has raised questions over the effectiveness of the Confederation of British Industry in defending manufacturing while supporting the service sector.
But an EEF spokesman dismissed suggestions of rivalry between the organisations: `We’re strong supporters of the CBI and work closely on a large number of issues. But they cover a broad church while we focus on a specific sector.’
The key recommendations of the joint budget submission are: permanently increase first year capital allowance to 100% for small and medium-sized enterprises; favourable tax treatment for long-term investors in smaller firms; R&D tax credits for all companies; more resources for education and training to fund college engineering departments and over-25s undertaking modern apprenticeships; and an alternative proposal to the energy tax.