BPIF seeks Budget to promote investment and protect skills to help manufacturers lead recovery

The Chancellor must use the forthcoming Budget to introduce targeted and short term measures on investment, skills and innovation that will enable manufacturers to prepare the ground for an eventual recovery and help deliver a more balanced economy according to the BPIF.

Together with twelve other manufacturing organisations, the BPIF has written to the Chancellor to warn that the economic environment for manufacturing is the worst for at least 30 years, with output set to contract by close to 10% this year. A copy of the letter is attached. The BPIF argues that the need for short-term measures to have an immediate impact is therefore becoming increasingly urgent. These should focus on minimising additional costs on businesses, alleviating cashflow pressures facing manufacturers and supporting vital long-term investment.

The BPIF has made the following recommendations:

• holding business rates until April 2011 and restoring empty property rates relief

• implementing a temporary increase in the Annual Investment Allowance to £250,000 for one year
• providing some temporary support to help companies hold on to important skills through wage subsidies for employees on short-time working, as other countries have done
• a temporary extension of a payable tax credit to large companies engaged in low-carbon innovation projects
• a delay on any regulations in the pipeline which might negatively impact on companies’ flexibility
• urgent measures to underwrite trade credit insurance

BPIF Corporate Affairs Director Andrew Brown says: “the events of recent months have cemented the view that long-term growth can only be sustained with a mixed and balanced economy in which the UK’s competitive manufacturing base plays a greater role. However the acute pressures facing manufacturing in the current economic climate put at risk the government’s ambition to move to a more balanced economy. The contribution of manufacturing to the UK economy in the medium term will depend on its ability to navigate through the current recession, together with the targeted support necessary to avoid a retrenchment in investment and loss of skills”

Click here for the letter