Positive vibes

George Osborne’s Budget speech delivered recently generally seemed to resonate positively with the manufacturing sector. Notable highligh

George Osborne’s Budget speech delivered recently generally seemed to resonate positively with the manufacturing sector.

Notable highlights included the cut in Corporation Tax to 20%, the freezing of fuel duty rates to specific incentives related to new enterprise zones, support for North Sea oil and the welcome news regarding R&D Tax credits.

Not surprisingly, my inbox has been a hive of activity with comment on the Budget but the general consensus seems to share my view that its contents were largely positive. Nothing is ever perfect but this particular offering from the Chancellor did at least tick some boxes.

Chris Coopey, head of the manufacturing group at MHA, the national association of independent accountants commented: “George Osborne’s Budget speech resulted in a raft of announcements that are largely seen as positives for the manufacturing and engineering sector. At long last, governments are smelling the coffee and realising how much the country can benefit from growing its manufacturing base.”

The MTA welcomed the announcement by Mr Osborne that he would not be cutting the Annual Investment Allowance from £500,000 to just £25,000 at the end of the year. James Selka, the MTA’s CEO said: “Having the Annual Investment Allowance (AIA) fall of a cliff edge on the 31st December would be disastrous for manufacturing investment. The very possibility that it might happen is inhibiting long term planning. We now need now an end to the seemingly annual changes to the Capital Allowance regime and for Government to settle long-term on a system that makes investing in the UK internationally competitive.”

Justin O’Hagan, tax partner at PwC said: “This Budget wasn't a radical one for UK industry but there was some welcome news with the announcement of a review of Business Rates. This had been seen as long overdue by many. The abolition of National Insurance for under-21s and young apprentices is a welcome development for employers and we expect this to create more jobs in industry for young people.”

An interesting counterpoint comes from Ben Halford, chief executive of Surface Generation, a composite manufacturer based in Leicestershire who stated: “The Budget has done nothing to address the biggest issue facing businesses – the lack of skills in the UK workforce.

“The biggest challenge we and many other businesses face is recruiting quality, skilled staff. There are simply not enough skilled engineers in the UK and now 15% of our workforce comprises people from other countries.

“The Government should relax immigration laws to make it easier to hire the right staff from outside of the EU irrespective of election pressures. The country needs to double the number of entrants into engineering across all levels of qualification, but in the short-term it must be made easier for employers to recruit from outside of the EU.”

 

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