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Budget does little for manufacturing

A Manufacturing Technologies Association product story
Edited by the Engineeringtalk editorial team Apr 14, 2003

The Manufacturing Technologies Association has reacted to the Chancellor's Budget statement.

The Manufacturing Technologies Association has reacted to the Chancellor's Budget statement by saying his bullishness about the state of the UK economy and his optimistic growth and borrowing forecasts mask the fact that he has done almost nothing to help manufacturing at a very difficult time.

The Chancellor's own growth figures for manufacturing output in 2003 average at 0.5%, when the 'Red Book' shows that 2002 was one of the worst years for manufacturing output since the Second World War, when it fell by 4%.

This means that for much of manufacturing, the next year will remain very tough.

At a time when real action was needed, the Chancellor ignored the consistent lobbying of manufacturing for real measures to help investment, which would raise our productivity as a nation.

The MTA had called for an increase in capital allowances to 100% in the first year for SMEs investing in capital equipment.

The association specifically pointed out the anomaly that for the past three years, 100% capital allowances have existed for the purchase of new ICT equipment for small companies, but not for the purchase of computer controlled manufacturing equipment.

MTA suggested that including these would encourage manufacturers to invest in the highest technology possible and therefore help raise our productivity and competitiveness as a nation.

This suggestion was ignored in the Budget and while 100% capital allowances for ICT were extended for another year but without expanding the definition.

MTA President, Paul Maynard commented: "We are once again extremely disappointed at the Budget which has done very little to help British manufacturing at what is an exceptionally difficult time.

Although the Chancellor has offered a few crumbs, such as a review of the definition of R and D tax credits and the scrapping of a raft of regulations and restrictions, it provides very little and, frankly, manufacturing needed real action rather than more consultation.

While we welcome the Chancellor's announcement of a consultation on access to finance for SMEs - and we intend to play our part in such a discussion - this is another area where manufacturing needed action rather than more talk.

In our own Budget letter and in our Joint Budget submission with EEF and 23 other engineering trade associations, we proposed well thought out and practical suggestions to the Chancellor.

That they have been ignored this year, after last year's raising of employers' national insurance contributions, being introduced this April, is a real slap in the face for manufacturing and will mean that the future of many small manufacturing companies remains in the balance".

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