Leaders of the UK’s manufacturing sector have backed the CBI’s estimates over the increasing cost burden being faced by companies and urged the government to allow some breathing space by removing the spectre of further tax increases in the forthcoming pre-budget statement.
In its submission, ‘ An Environment for Investment ‘, the EEF (Engineering Employers Federation) along with 24 other trade bodies representing some 10,000 employers, has given a strong warning of the consequences of adding to manufacturing costs at a time when profitability is already at its lowest level for nearly twenty years.
It pointed out that, despite the reduced levels of corporation tax, overall business taxation will be £6bn higher next year alone, equivalent to almost half the total business expenditure on R&D across the economy. In a reference to the damage being done to the UK’s business friendly environment, it also stressed the decline in recent years of the number of inward investment projects in manufacturing and referred to the Government’s own competitiveness indicators which show the UK losing its competitive advantage.
EEF Director General, Martin Temple, said: ‘Manufacturing competes globally and the government now has a clear choice to make between protecting our competitive advantage, or continuing the trend of the last few years of the gradual erosion of our flexible, low cost environment.’
‘If we continue to make the UK a less welcoming environment for manufacturing companies then business will simply vote with its feet and the movement abroad of our manufacturing base will accelerate.’