“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 on investment, trade credit, low carbon technologies and car scrappage are helpful though he should have gone further to make a real difference.
“However, the growth forecasts look overly optimistic and there is a serious danger that business will pay the price in higher tax if growth falls short.”
“Manufacturers will also be disappointed that the Chancellor has hit them with the double whammy of failing to provide support for short time working whilst increasing the costs of redundancy.”
On support for Low Carbon Technologies Gilbert Toppin added:
“Whilst the Chancellor promised much in this area, there appears to be little new money on offer.”
2. Investment Allowances
Commenting, EEF Chief Economist, Steve Radley, said:
“Doubling the level of capital allowance will provide some relief for cash strapped companies looking to invest. However, it provides only limited incentives for the new investments small and growing manufacturers need to make to capitalise on the upturn.”
3. Short time Working
Commenting, EEF Chief Economist, Steve Radley, said:
“With today’s figures showing manufacturing job losses accelerating, it is disappointing that government has not felt able to back companies’ efforts to avoid redundancies, especially given the help available in other countries. This risks loss of more key skills than is necessary and hamper companies’ efforts to take advantage of the upturn.”
4. Statutory Redundancy Pay
Commenting, EEF Head of Employment Policy, David Yeandle, said:
“At a time when companies are facing severe pressure on cashflow this will increase employers’ costs. Raising the maximum week’s pay will also have a disproportionate impact on manufacturing where rates of pay tend to be higher than in other sectors.
“If the government wants to support the most vulnerable workers it should have introduced a minimum weekly pay for calculating redundancy pay across the economy, rather than impose further costs on manufacturers.”
5. Trade Credit
Commenting, EEF Head of Economic Policy, Lee Hopley, said:
“By stepping in to top up any coverage that has been reduced, the government’s guarantee should help minimise the knock on consequences for healthy suppliers. Whilst the measure is not a silver bullet, it will provide temporary relief that should see supply chains through until demand picks up and cashflow eases.
6. Pensions Relief
Commenting, EEF Head of Employment Policy, David Yeandle, said:
“It is worrying that the government has opened the door to reducing tax relief on pension contributions when it is trying to encourage more people to save for their retirement. This could accelerate moves away from occupational pension provision.”