George Osborne’s Budget received a positive response from the British Plastics Federation (BPF), with the organisation’s director-general, Peter Davis, calling it “good for manufacturing”.“In the BPF-led Seven Associations letter to the Chancellor in February we asked him to extend the £250,000 tax free allowance to upgrade equipment and expand production. In fact he has doubled it to £500,000 until December 2015. This will boost investment and productivity in the plastics industry,” said Davis.
He also welcomed Osborne’s doubling of UK Export Finance’s direct lending programme to £3bn. “This will greatly help SMEs to start exporting. Our trade deficit in goods was £106bn in 2012. We must reverse that.”
The BPF said the £30m funding for a graphene innovation centre would have a direct impact on plastics and it also welcomed the extra £85m for apprenticeships grants for employers.
“We expect the plastics industry to directly benefit from this at a time when it is being hit by a growing skills shortage,” Davis said.
He also supported the lengthening of the cap on the Carbon Price Support Rate and the extension of the compensation scheme for energy intensive industries.
Meanwhile the Chancellor’s announcement on investment allowances went down well with companies selling injection moulding machines.
Noting the Budget’s political contents as well as its economic ones, Graeme Herlihy, managing director of Engel UK, said: “Given our position in the electoral cycle and the positive news in the economy, it is not surprising that the Budget focus has swung from austerity to popularity.
“Nevertheless, the doubling of the investment allowance will hopefully help to encourage business investment, and shows that the government has at least half an eye on manufacturing as the route to economic recovery. And there’s a penny cut from beer duty – what’s not to like about that?”
With the Budget’s detail to be further examined Nigel Flowers, head of Sumitomo Demag in the UK, nevertheless said the stand out point to be welcomed was the doubling of the Annual Investment Allowance to £500,000.
“Offering tax relief of 100% up to £500,000 on qualifying capital expenditure, will be help to drive investment in new equipment, not only improving the productivity of UK plc but also making it a great time to look at an investment in a new machines.
However there was disappointment in some quarters. Chris Dow, chief executive of Dagenham-based recycler Closed Loop, said while he welcomed the Budget’s focus on manufacturing George Osborne’s speech lacked what he called “any robust initiatives to drive the industry forward, despite ongoing consultations regarding PRN and PERN reform.
“The landfill announcement shows that there is a commitment to a longer term strategy on landfill tax levels, but there needs to be decisive action before the next election in order to create some stability in the industry and confidence among investors.”