Budget 2014

Budget greeted mainly with bouquets but one brickbat

By Michael Stones contact

- Last updated on GMT

Related tags: Fuel duty, Investment, Alcoholic beverage, Manufacturing, Chancellor

Chancellor George Osborne's Budget drew mainly bouquets from business leaders
Chancellor George Osborne's Budget drew mainly bouquets from business leaders
Chancellor George Osborne’s Budget has been greeted mainly with bouquets, as business leaders praised action on energy prices and exports, while some expressed disappointment about his failure to cut fuel duty.

The Forum of Private Business, like many business organisations, highlighted positive action on energy policies and exports. “There are sizeable gains for UK manufacturers here in particular over the next few years,” ​said Phil Orford, the forum’s chief executive.

“On exports the chancellor has thrown his weight behind getting more businesses exporting. Our membership is confident about growth but much of that growth is UK based so we needed to see such a commitment, though we will continue to work with the Treasury and others to develop even healthier export subsidies for business.”

Help all levels of business

The budget will help all levels of business, with perhaps a slight focus on the mid-size energy intensive and manufacturing businesses, rather than the very small firms. “However, it does help to tackle the cost of energy and makes good on the commitment trailed before the Budget to support those that look to invest, either in the UK – with a more extensive Annual Investment Allowance – or abroad, with a £3bn export support budget,”​ said Orford.

The Food and Drink Federation (FDF) said the chancellor had listened to its growing concerns on the impact of increasing energy prices on the competitiveness of food and drink. Melanie Leech, FDF director general, said “The changes will provide welcome relief to businesses large and small and reward those who invest in energy efficient technologies.”

Adopting the FDF’s recommendation to freeze Carbon Price Support (CPS) will help all food and drink manufacturers. Also the exemption of industrial combined heat and power plants from CPS for the on-site generation of electricity would benefit existing and new users of the technology, said the FDF.

Ditch the alcohol duty escalator

The alcoholic drinks industry reacted with delight to the decision to ditch the alcohol duty escalator and freeze the duty on spirits. David Frost, chief executive of the Scotch Whisky Association, said: “It is a move that supports hard-pressed consumers, a major manufacturing and export industry and the wider hospitality sector.”

The Freight Transport Association (FTA) welcomed the freeze in fuel duty but slammed the chancellor’s decision not to cut fuel duty by 3 pence per litre.

James Hookham, FTA md policy and communications, said: “The chancellor has kept his promise to freeze fuel duty and industry will be £187M a year better off for that. But he missed the opportunity to stimulate the economy further by reducing fuel duty and putting around £690M into the pockets of families and British business.​ 

“This could have given a further stimulus to the economy and locked in the positive growth already achieved.”

More budget reaction:

Emyr Jones, ​Farmers' Union of Wales, president:

“Although he announced the fuel duty rise planned for September will not happen, we are naturally concerned that he didn't go further and cut duty by a few pence in a budget aimed at 'building a resilient economy. The biggest expense for farmers and anyone else living in rural areas is fuel costs so it is extremely disappointing that his decision to freeze duty for a fourth year will do little to help businesses in our rural communities to prosper.”

Meurig Raymond, National Farmers Union, president:

“Despite the reasonably good news on the investment allowance for plant and machinery, any incentives for capital infrastructure investment were sadly lacking in today’s budget. This is all the more frustrating given that few farming businesses are in a situation to benefit from the continued reductions in corporation tax. While the chancellor talks about adding resilience and balance to the economy, farmers need to invest in capital items, and not just plant and machinery.”

 Darren Jukes​, PwC UK, manufacturing leader:

“The Budget announcement has been good news for manufacturers. The roll back on green taxes and exemption from carbon costs will go a long way to helping businesses become more competitive. The chancellor highlighted the manufacturing renaissance in the US and this is something that we are more and more confident of emulating in the UK.”

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