By Ben Simmons
Ahead of this week’s Budget statement EEF, the manufacturers’ organisation, has called for the government to put the focus back on what it will do to promote more balanced growth .
Industry needs to see a clear signal from government about its ambitions for the UK economy and about how it is creating the right environment for firms to make their next investment here. Though the government is looking at some useful measures to promote growth, the growing debate on new taxes and tax avoidance risks distracting attention from the need to boost confidence and get industry investing and creating new jobs.
“Right now the top priority for our economy is to boost growth through investment and exports and to create more jobs,” says EEF Chief Executive, Terry Scuoler, . “Industry can deliver the growth but to do so it needs to hear a clear message from government on its ambitions for our economy and how it plans to achieve them.
“The growing debate on new taxes and tax avoidance risks drowning out this messages and the Budget needs to get the focus back on to growth. We need the government to provide the same clarity on its strategy for growth as it does on its plan for reducing the deficit.
“The Budget needs to demonstrate to industry that the government has clear a plan for creating the right business environment over the rest of this Parliament, that all of government is behind this and that it will hold itself to account in delivering this. It needs to back this up with immediate measures to help firms invest and access the finance and skills they need.”
EEF backed its call by arguing the immediate priority for government must be measures which will help deliver the increases in investment and exports which will be needed to drive growth this year. Priorities to do this must include a two year temporary increase in capital allowances to 100%, ensuring that its new National Loan Guarantee Scheme which is designed to reduce the cost of credit is widely available and accessible to business and reducing national insurance contributions for firms recruiting 18-24 year olds. It also cautioned against increasing the Carbon Price Support.
Looking to the medium term EEF is calling on the government to focus on four key aims and measures of success:
• More companies bringing new products and services to market
• More globally-focused companies choosing to expand in the UK
• A lower cost of doing business in the UK
• A more productive and more flexible labour force
It has also sets how government should measure its progress. For example, under the cost of doing business by 2015 Britain should have below average EU industrial electricity prices, the most competitive tax system in the G20 and should see a net reduction of 10% in the burden of complying with domestic regulation.