Seven manufacturing organisations representing the plastics, rubber, coatings and associated machinery and tool making sectors, have written an open letter to George Osborne in anticipation of the 19th March Budget Statement, reiterating the message that the “job is not even half done” when it comes to economic recovery and growth.
The Seven Association Alliance, which is coordinated by the British Plastics Federation and collectively represents 310, 000 employees from 6,100 companies, says the optimism of member companies benefitting from good levels of business suggests “recovery is firmly in place”, however, that more is needed to achieve the expectation of a Budget surplus in the UK by 2018.
The Alliance has put forward a number of proposals for Government action.
On housing and construction, the seven associations have called for a reduction of the VAT rate to five percent on energy efficient products such as EPS insulation and PVC-U double glazing, calling for a complete review of the ‘Green Deal’, saying it has an “unattractive payback” and is “complex”.
Regarding shale gas extraction, the letter welcomes the reduced tax rate for exploration announced in the Autumn Statement. “It is important that the local communities benefit from jobs in the new industries it creates, in addition to the community benefits the Government has announced. The energy and plastic raw materials created must not be exported when this comes on stream in the 2020s,” it states.
“We cannot accept Ministers’ reassurances that there is no risk of energy not equalling demand in the next decade,” says the Alliance, adding that the Government needs to act “with more urgency” to ensure costs to industry are kept low and affordable, as well as to speed up the replacement of power generation capacity using Energy from Waste.
The letter calls once again for the Chancellor to increase landfill tax, proposing £200 per tonne by 2020, to drive recyclable waste from landfill. “Some of the increased receipts for the Treasury could be used as grants to stimulate investment in more recycling and Energy from Waste facilities,” says the Alliance.
With regards to finance for business, the letter urges Government to provide more coherent access to small business lending under the auspices of the British Business Bank, as well as to “freeze or cut business rates.”
The letter also urges the Chancellor to extend the £250k tax-free allowance for companies to invest in upgrading equipment and expanding production. “This should improve manufacturing productivity which is 0.8 percent lower than pre-recession levels,” it says.
The skills shortage was once again reiterated, with the letter highlighting the lack of technical managers and staff. It proposes a reduction in tuition fees for certain science and engineering courses to increase the number of students studying for these degrees.
Finally, the letter accuses the Government of “knee-jerk gesturism” in its proposal for a 5p charge for plastic carrier bags. “We hope the Government will withdraw this proposal and steer clear of other similar flawed ideas,” it states.