Budget 2015

Food firms to Osborne: ‘give us dedicated strategy’

By Laurence Gibbons

- Last updated on GMT

Food manufacturers have set their wish list for Osborne's Budget
Food manufacturers have set their wish list for Osborne's Budget

Related tags Economic growth

Food and drink manufacturers have called on Chancellor of the Exchequer to set a “dedicated competitiveness strategy” for food and drink to help them tackle challenges around innovation, health and skills in today’s Budget.

The Food and Drink Federation (FDF) said the strategy was “fundamental”​ to the food and drink industry’s success in an open letter to George Osborne.

The strategy would help food and drink manufacturers make a “significant contribution”​ to the government’s productivity plan, the FDF claimed.

“It would underpin and sustain our sector’s economic growth, so we achieve our goal to grow by 20% by 2020,”​ the FDF’s director general Ian Wright wrote.

The food and drink sector was in a “prime position”​ to help drive British productivity and regional growth, as it has 400,000 employees, is worth £21.5bn to the UK economy and contributes almost 16% of total manufacturing turnover, the FDF claimed.

The manufacturers’ organisation EEF said Osborne should set measures that would boost growth and productivity, targeted on infrastructure, skills and taxes.

Critical in tackling skills gap

Manufacturing will be critical in tackling the UK’s productivity and skills gaps and the government needed an overall industrial strategy aimed at rebalancing the economy, EEF chief executive Terry Scuoler said.

“The challenge for this government is to take the economy from recovery to sustainable growth,”​ he added.

“That requires stable policy with an eye to building the skills, infrastructure and technological innovation which will allow internationally competitive, high productivity companies to succeed in the UK.”

EEF supported the need to reduce fiscal deficit but warned by ring-fencing budgets for some departments the government had unnecessarily tied its hands.

“Instead of an across-the-board tariff cut for all unprotected departments, this week’s announcement should prioritise reforms to business taxation and investment in future technology, infrastructure, skills and other contributors to productivity growth.”

Instead, EEF is urging the government to use the current economic growth to carry on backing the successful industrial policy of recent years.

Sabotage economic growth

The Freight Transport Association (FTA) said failing to freeze or cut fuel duty in today’s Budget could sabotage the country’s economic growth.
The Association, which has 14,700 members in the logistics industry, claimed falling fuel prices had been a major factor in the country’s recovery.  But high taxes meant transport operators haven’t benefited, with only a 13% cut in prices at the pump despite a 43% drop in world oil prices, the FTA claimed.

Its chief executive David Wells wrote to Osborne urging him not to break previous promises to hold current levels until September. 

“Cash flow pressures will cause many businesses to implement cuts if the Chancellor raises fuel duty, and that would be detrimental not only to the businesses themselves but also to the economic growth of the country as a whole,” ​Wells wrote.

Meanwhile the Confederation of British Industry (CBI) called for a five-point plan to boost productivity through: supporting medium-sized businesses, investing in talent, improving infrastructure, encouraging innovation and supporting exports.

EEF Budget wish list

  • A roadmap for the development of business taxation to 2020
  • A tax system that encouraged investment in future productive capacity
  • Reformed capital allowances to ensure they mirror actual depreciation, restoring buildings investment allowances
  • Extending the Annual Investment Allowance from January 1 2016 at £250,000
  • Removing investment in plant and machinery from business rates valuations
  • Protection of research and development tax credit
  • Continued commitment to the full implementation of the Energy Intensive Industries Package
  • Maintain the pipeline of infrastructure projects already identified in the Road Investment Strategy and local growth deals
  • Enable local authorities to protect local roads spending
  • Maintain spending on skills and training that are of value to business
  • Stick to the plan of channelling skills funding though employer-directed vouchers
  • Maintain defence spending at a credible level
  • Maintain export support

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