The Food and Drink Federation (FDF) singled out the changes to capital allowances and the commitment to further cut the rate of corporation tax.
FDF director general Melanie Leech said: “As the country’s largest manufacturing sector and with a vision shared with government to grow the sector by 20% by 2020, FDF welcomes the targeted measures in the autumn statement.
“The chancellor’s announcements on increasing the annual investment allowance and reducing the headline rate of corporation tax should both stimulate business investment.”
Leech said this was great news for an industry that encompasses businesses of all sizes – from global companies choosing to invest in the UK through to small- to medium-sized enterprises (SMEs). Many SMEs were looking to grow their operations in response to growing overseas demand for food and drink products, she said.
“The food and drink manufacturing sector has experienced seven consecutive years of export growth, which will continue,” she said.
“We are pleased that UKTI [the government department UK Trade and Investment tasked with developing exports] has recently strengthened its commitment to support food and drink businesses. We welcome today’s announcement of its funding increase and of the new export finance facility, which should also help even more companies to grow through export.”
The FDF also welcomed the chancellor’s commitment to scrap the proposed hike in the fuel price next month. “This is a welcome announcement that will help both shoppers and businesses who are already feeling the pinch of rising prices,” said Leech.
The National Farmers Union (NFU) said the rise in annual investment allowance from £25,000 to £250,000 will be a boost for farming. The decision will bring forward tax relief on plant and machinery investments from January 2013 for two years.
NFU chief economist Phil Bicknell said: “I am delighted the government has listened to the NFU’s call for a significant increase in the annual investment allowance. Immediate spending increases on plant and machinery may be limited for many following the challenges of this year’s harvest, but this will undoubtedly boost farm business investment over the next two years.”
He added: “This move will pay dividends. We firmly believe that one of the key drivers to help push the economy forward is investment in new technology, which in turn will increase productivity and efficiency.”
Meanwhile, the not-for-profit sustainability organisation Forum for the Future said this week that all food business were ultimately agricultural companies because they relied on agricultural inputs,
Speaking at the launch of the FDF’s new sustainable ingredient sourcing guide , Dan Crossley, the forum’s principal sustainability adviser, said. “Even companies such as PepsiCo with multiple billion dollar brands, would not be a branded company if they did not have the raw materials to put on the shelves. That is the same for any food manufacturing company.”