Today’s statement should have been used to outline how the structural shortfall in the public finances was going to be tackled. Instead it went for the easy targets (tax cuts for boilers and bingo) and fudged the tough decisions necessary to achieve this.
Responding to today’s Pre-Budget statement, Steve Radley, Director of Policy at EEF, the manufacturers’ organisation said:
“We also needed to see tangible action to begin re-balancing our economy. However there were only limited measures which are unlikely to drive broad-based growth.
“Whilst there are some helpful measures such as deferring the increase in corporation tax for small firms, the failure to extend capital allowances for investment removes support at just the time in the cycle when firms could most benefit.
“Business will now be faced with a further six months of uncertainty as to how the Chancellor plans to tackle the deficit.”
On the increase in National Insurance, Steve Radley, said:
“Given the increase already in the pipeline, this measure is a further tax on employment which will do little to help employers create jobs just as the recovery will be gaining pace.”
On Public Sector Pensions, EEF Head of Employment Policy, David Yeandle, said:
“Whilst the government has made a good start on the reform of public sector pensions, today’s measures fall short of the fundamental reform which was needed.”
On Innovation, Senior Economist, Jeegar Kakkad, said:
“While incentives to boost investment in biotech and pharmaceuticals are helpful, the narrow focus on intellectual patents is puzzling. Patents are only a small part of the UK’s broad innovative activity. Changes to their tax treatment would benefit only a limited set of companies at the expense of a broader-based rebalancing of our economy.”
On the National Investment Corporation – Chief Economist, Lee Hopley, said:
“A new Capital Growth Fund investing in growing businesses could help begin the process of rebalancing our economy. For innovative, fast growing manufacturers, the current banking system had become unfit for purpose.”
“The current situation provides the ideal opportunity to take stock and reform the financial architecture of the banking system. But details on the ultimate scale and delivery of the funds to business will determine whether the Fund will succeed where too many government schemes have failed.”
On Climate Change Agreements, EEF Head of Climate & Environment Policy, Gareth Stace, said:
"EEF is disappointed that the Chancellor reduced the rebate incentive within the current Climate Change Agreements from 80% to 65%. Instead of encouraging business to invest in reducing carbon emissions, as the current approach does, he opted to take away one of the key incentives that encourages industry to make those investments. This will hit the most energy intensive sectors which already are paying higher energy costs than many of their competitors.”