The final Budget before the next general election will unveil the government’s deficit reduction plan–meaning cuts and cost saving measures will be announced for departments across Whitehall.
The Treasury has pledged to halve the UK’s £178bn deficit by 2014, but the chancellor has stated he would not be pushed into accelerating the rate and scale of his plans in this Budget.
Yet the road to economic recovery will require more than cuts, argue many in the UK’s green-tech and manufacturing industries. They are asking the government to provide further support for the growth of their industries, which they believe will give the UK the economic boost it needs.
A major new lobbying campaign launched by the Environmental Industries Commission (EIC) has called on the government to use the forthcoming Budget to support the UK’s environmental industry through a new Green Jobs Investment Fund that would provide, among other things, targeted fiscal and monetary incentives for green technologies.
The EIC state that fiscal reforms are needed to put a price on pollution and better reward environmentally sustainable behaviour. The commission claim this will help drive investment into the UK’s high-growth environmental industries at a low cost to the Treasury. According to their estimations, these reforms will stimulate growth and ‘green jobs’ by helping put British companies at the forefront of a $3tn global market place for environmental goods and services.
The manufacturing sector is also calling for greater support from government. Tom Lawton, head of manufacturing at BDO, stated that the government recognises the importance of manufacturing and exports in helping to deliver an improved economy, but there are number of specific concerns that could be make or break for the industry.
‘The range and severity of the industry’s concerns – from a fear that effort and resources are spread too thinly between competing initiatives, to doubts that the government fully grasps the challenges facing mid-tier manufacturers in particular – shows that the chancellor Alistair Darling must use this Budget to make a stand for manufacturing,’ he said.
Lawton said Darling will only ‘win over’ the manufacturing industry and return the economy to growth by demonstrating in his budget methods for supporting and strengthening the UK’s manufacturing base.
‘That means being prepared to follow through on the political speak with real, tangible delivery on the ground,’ he said.
Meanwhile the UK’s top business lobbying organisation has forecasted gloomy economic figures over the next year. In its latest published predictions for GDP growth, investment, inflation, employment and interest rates, the CBI expects recovery in the UK economy to remain sluggish until the middle of 2011.
The CBI claim the sluggish economy can be part blamed on the ending of certain stimulus measures such as the VAT cut and car scrappage scheme. GDP is not expected to return to pre-recession levels by the end of 2011.