Manufacturers call for budget relief

The manufacturers’ organisation EEF, along with 12 other manufacturing organisations, say the economic environment for manufacturing is the worst for at least 30 years, with output set to contract by close to 10% in 2009. Short term measures should therefore focus on minimising additional costs on businesses, alleviating cashflow pressures facing manufacturers and supporting vital long term investment, says EEF which is also calling for the introduction of a temporary scrappage incentive scheme for the motor vehicles sector. EEF chief economist, Steve Radley said Alistair Darling (pictured) had made a good start by staggering the increase in the business rates that companies were facing this year. “In the meantime, acute pressures remain and threaten to undo the great strides made by manufacturers in recent years to improve performance,” he went on. “Without further action we risk further hollowing out of the supply chain and the loss of viable companies in key sectors. The government must back its rhetoric on the need for a more balanced economy with firm actions targeted at supporting companies’ efforts to retain skilled employees and maintain investment.” EEF is calling for a temporary increase in the annual investment allowance from £50,000 to £250,000 and for measures to protect skilled employees and support companies’ efforts on short time working. In addition, it is recommending: • restoration of relief on business rates on empty property • an extension of R&D tax credits to large companies engaged in low carbon innovation projects • introduction of a temporary scrappage incentive scheme for the motor vehicles sector • measures to underwrite trade credit insurance • the postponement of increases in indirect taxes such as the climate change levy and landfill tax • full use of the three year period available to implement the temporary agency workers directive