Budget must help manufacturers prepare for better times

Ahead of Wednesday’s budget, EEF says the Chancellor must place positive measures to promote investment at its heart and set out a framework for putting the UK economy on a more sustainable path. For the past six months manufacturers have been grappling with a collapse in global demand, but attention is now turning to preparing for the upturn and the Budget should focus on helping manufacturers prepare for the upturn by supporting investment in modern machinery and innovation, EEF says. Among its demands are a temporary increase in the Annual Investment Allowance from £50,000 to £250,000 and a temporary extension of the payable R&D tax credit to large companies engaged in low-carbon innovation projects. For the longer term, the Chancellor must also send a strong signal to industry about how government policy intends to deliver a broader base for growth across the UK economy. The government needs to outline how it will use its influence as a customer, a regulator and an investor to redress the serious imbalances in the economy and ensure the UK can meet long term challenges like climate change. EEF chief economist Steve Radley said: “This is also an opportune time for the government to outline its commitment to a strategy for the long term. Manufacturers are preparing for the upturn and are looking for the Budget to provide forward-looking and positive measures to help them cement their competitive position for the future and a framework for how it will support them to achieve this.”