Commenting on today’s Budget statement, Terry Scuoler, Chief Executive of EEF, the manufacturers’ organisation, said:
“Today's Budget may have given manufacturers much-needed clarity on how the government will go about reducing the deficit, but the short-term pressure to start tackling the deficit means the Chancellor has only done part of the job of rebalancing the economy.
“While businesses will welcome long-term reform and predictability of Corporation Tax and, have been spared the worst impact of changes to Capital Gains Tax, predictability has come at the cost of competitiveness.
“In recent weeks, manufacturers had been encouraged by strong commitments from the Prime Minister and the Chancellor on the role of manufacturing in a better balanced economy. They will now be left wondering where the necessary growth and investment will come from, given the cuts to investment allowances and capital budgets.
Commenting on Corporate Tax Reform, EEF Chief Economist, Lee Hopley, said:
“The UK’s tax system needs reform to keep it modern and internationally competitive. Manufacturers will see the plan as a useful first step towards improving competitiveness and predictability after the drift in tax policy and strategy during the past few years. Hopefully this more deliberative process should stop the legislative churn that has added to complexity.”
On the CGT regime, EEF Senior Economist, Jeegar Jakkad: said:
Closing the gap between income and CGT rates is right because the wider the gap between the two, the greater the incentive for tax evasion. Minimising that gap should make the tax system fairer and more efficient. Increasing the lifetime cap for the Entrepreneurs’ Relief will provide a significant boost for entrepreneurs and investors, while maintaining the annual exemption will be vital for employees.
On corporation tax and allowances, EEF Senior Economist, Jeegar Kakkad, said:
“Reducing the corporation tax rate over time was in principle the right course of action. But financing it, in part, by cuts to investment allowances will be a heavy price to pay, especially for smaller companies. It might be a positive signal for large companies, but not for their suppliers.
On NICs, Lee Hopley added:
“Following through on the pre-election pledge to reverse the cost of the planned increase will come as a relief to business, many of which would have been forced to absorb the increase in already squeezed margins.”
On proposals for a Green Investment Bank, EEF Energy Adviser, Roger Salomone, said:
“The consolidation of disparate sources of support for the low carbon economy into a single institution is a step in the right direction towards more effective and strategic use of limited public funds. The acid test, however, will be the new bank’s ability to attract private finance.
On Energy Taxation, EEF Head of Climate & Environment, Gareth Stace, said:
“Industry will be heartened that government has listened to widespread concerns on inequities in investment in low carbon energy. The aggressive timetable to deliver reform next year matches the vital need to promote investment in our energy infrastructure.”
On raising the State Pension Age, EEF Head of Employment Relations, David Yeandle added:
"Industry recognises that the state pension age has to be raised more quickly than previously planned to help address the public sector deficit. However, this must be done gradually and in a way that allows those close to retirement sufficient time to make the necessary preparations.”