British industry broadly supportive of business budget 20 March 2014

Industry is broadly supportive of yesterday's (19 March 2014) budget, with the CBI and Siemens – two useful barometers – describing Chancellor George Osborne's speech as putting wind in the sails of business investment, especially for manufacturers.

"It's encouraging to see higher than expected growth in the short-term but, as the Chancellor recognised, tough challenges remain ahead, so it's right that the budget reflected the fiscal reality," said CBI director general John Cridland.

And Juergen Maier (pictured), managing director of Siemens Industry, echoed the sentiment, saying: "The improved forecasts for growth are positive and we welcome the increased support for manufacturers in this budget."

However, turning to the detail, both men singled out the Chancellor's support for energy-intensive industries, business growth, export finances and apprenticeships for special attention.

"The CBI has pushed hard for this significant and much-needed energy package that will help keep manufacturing jobs in the UK, while underpinning vital investment in new energy," commented Cridland.

"Our energy intensive industries are crucial to building a low-carbon economy and it's right the government is taking action to mitigate the cost for these firms," he continued. "But many more businesses across the country are struggling with high energy costs and these measures will help support key sectors against tough international competition."

Maier's view: "We're pleased with the £1bn compensation to protect manufacturers, especially high intensive energy users from certain green levies. But this should not be misinterpreted as green levies being generally negative.

"We need to strike the right balance between increasing renewable energy generation – having competitive energy pricing alongside manufacturers being incentivised to increase the focus on energy efficiency measures."

But for Cridland, there's more to be done: "We now need to see action from ministers to secure an ambitious EU-wide 2030 emissions reductions target to drive investment in our low carbon future."

Moving on to financial support, Cridland pointed to the doubling and extension of the Annual Investment Allowance, which he described as "a shot in the arm for businesses ready to invest and drive the recovery".

He also cited the Seed Enterprise Investment Scheme, now made permanent. That, he says, boosts the range of financing options available to businesses and will "spur greater use of equity finance in small firms".

Maier agrees, stating that the doubling of export finance to £3bn and halving the interest rates for this type of lending are both positive steps.

He also praises the increase of R&D tax credit for loss-making small businesses from 11% to 14.5%, which he sees as boosting early stage, innovative businesses which are often loss-making in the early years.

Maier's only criticism: "I was looking for more support for the now well established UK High Value Manufacturing Catapults to speed up the cycle from British based science and innovation to exportable products. Generally speaking, we need to get better at sustaining existing initiatives rather than starting new ones."

Finally, on support for skills and innovation, the CBI's Cridland states that, while the additional support announced for apprenticeships is very welcome, especially for smaller firms wanting to do more, "we still need to better demonstrate the benefits of apprenticeships to young people".

And Maier's view: "The increased support for science and engineering through doctoral training centres is positive, but much more still needs to be done for manufacturers in regards to innovation."

Brian Tinham

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