Budget offers real boost for manufacturers and exporters
March 31, 2014
George’s Osborne’s fifth budget as chancellor will be remembered by different people for different reasons, depending no doubt on personal circumstances and political persuasion.
However, putting politics completely to one side, it has to be lauded as a good budget for businesses, particularly manufacturing firms, in that it has addressed some of the biggest issues and current concerns of the business community.
In the run up to the budget, and the autumn statement before it, Chiks had been calling for government to give clarity on what would happen to the Annual Investment Allowance, which had been due to drop to just £25,000 at the end of 2014.
While we expected the £250,000 allowance to be extended beyond the end of 2014, it was a genuine surprise to hear the chancellor announce plans to increase this to £500,000 until the end of 2015. This offers real certainty for those businesses planning investments in plant and machinery and will enable them to fully exploit growth opportunities.
Meanwhile, the pledge to boost the export finance scheme by doubling the amount of finance available to £300bn, and a cut to the interest rate on loans made by the scheme, will be welcomed by all companies looking to break into export markets.
Plans to address the high cost of energy for manufacturers with a £7bn package of measures will also offer comfort to UK manufacturing firms who face the highest energy costs in Europe.
Of course, there will be many other issues that businesses would have liked to have seen further action taken on, such as a review of business rates, VAT and other tax issues.
But this was always going to be a fiscally neutral budget and the business sector, particularly manufacturing, has to be pleased, particularly with the Annual Investment Allowance increase which will cost government £2bn.