Alistair Darling’s Budget has attracted lukewarm reaction from industry despite a raft of measures aimed at bringing Britain’s engineering excellence to the front of the UK’s economic recovery.
In his Budget report, the chancellor Darling said that support for high-growth businesses in sectors such as advanced manufacturing, biotechnology and renewable energy, would allow the UK to achieve economic growth of 3.5 per cent by 2011.
New funding of £523m will be provided for the offshore wind industry and up to four carbon capture demonstration projects. A further £405m has been earmarked to advance green manufacturing and £760m will be made available to support emerging technologies.
In what Darling described as ‘the world’s first carbon budget’, £435m of extra support will also be made available for energy efficiency projects in homes and buildings as part of government plans to reduce the carbon emissions by 34 per cent in 2020.
Commenting on today’s Budget announcement, Gilbert Toppin, chief executive of EEF, said: ‘Given the most difficult economic conditions for a generation, the Chancellor has gone some way towards alleviating the short term pressures facing companies. The measures are helpful though he should have gone further to make a real difference.
On support for low carbon technologies, Toppin added: ‘Whilst the Chancellor promised much in this area, there appears to be little new money on offer.’
As well as supporting high-growth energy and technology businesses, a scheme to encourage the scrapping of old cars has been confirmed, with drivers to be given £2,000 towards a new vehicle in exchange for cars over 10 years old from next month.
Unite’s joint general secretary, Tony Woodley said: ‘We welcome Alistair Darling’s decision to introduce a scrappage scheme. Any scheme to stimulate demand for cars is welcome, but the UK can not afford to lose the workers who build them.’
Speaking about the scrappage proposals, Paul Philpott, managing director of Kia Motors, added: ‘I am personally disappointed that our Chancellor is only going half-way compared to other European governments. The reality is that the government is shifting a large part of the cost of this programme onto the shoulders of the manufacturers, when it is the manufacturers who are working hard night and day to deal with the effects of the economic turmoil and recession around the world.’
While funding to back high-technology businesses has been welcomed by the manufacturing, concerns remain over the lack of support for traditional engineering companies.
Petra Wilson, director of Research and Policy at the Chartered Management Institute (CMI), said: ‘This is very much a budget for carbon, not for careers. Obviously we do need to create an economy that’s sustainable and will bring us through the recession. However, we are concerned that the focus on high-technology, and particularly high-growth areas, will undermine our core manufacturing industry. Key people in manufacturing, such as machine tooling companies, that contribute quite a lot to our carbon emissions will need just as much support as newer technologies.’
Ian Godden, chief executive of the Society of British Aerospace Companies (SBAC) said: ‘Today’s Budget did not do enough to support the manufacturing success story that is the aerospace and defence sector. The government is seeking to rebalance the economy with a greater contribution from manufacturing but it has missed an opportunity to use our sector to do so today.
‘Aerospace and defence is worth £20bn per year to the UK economy delivering hundreds of thousands of jobs across all regions of the country and providing a positive balance of trade. It is well-placed to make a major contribution to the country’s economic recovery. However our success appears to count against us.
‘We are concerned that funding that will deliver further returns from our sector might be diverted to areas where such a positive outcome is by no means assured. Our aim now is to work with the government to demonstrate that it needs to maintain its current commitments to our sector to ensure current economic benefits are not lost holding back the ability of the British economy to recover from the current downturn.’
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