Budget ‘should prioritise productivity’
6 Jul 2015
Manufacturing trade body EEF says the government must focus on growth and productivity in its summer Budget.
As part of the Budget, which will be delivered to parliament by Chancellor George Osborne this Wednesday, Britain’s manufacturers want priority given to measures that will improve growth and productivity - with targeted measures on infrastructure, skills and business taxation considered to be the most significant.
The challenge for this government is to take the economy from recovery to sustainable growth
EEF chief executive Terry Scuoler
“The challenge for this government is to take the economy from recovery to sustainable growth,” said EEF chief executive Terry Scuoler.
“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,” he said.
The EEF is urging the Chancellor to draw spending ring-fences “as tightly as possible” around “investment in future technology, infrastructure, skills and other contributors to productivity growth” – as opposed to spending on services.
In an attempt to make the sector’s case stronger, EEF’s Budget Submission outlines the benefits of investing in manufacturing.
As well as better than average wages, manufacturing accounts for 27% of investment in machinery and equipment each year and 69% of R&D spending – and has a higher propensity to export than most sectors, the submission suggests.
What’s more, the submission also says manufacturing’s economic value is reflected in public opinion, with almost 90% of voters wanting the government’s policies to promote a stronger UK manufacturing base.
Figures released by EEF last month revealed a loss of momentum in manufacturing output and orders during the second quarter of 2015.
As a result of the findings, the EEF said it was “softening” its 2015 manufacturing growth forecast to 1.5%, while dropping its overall forecast for the economy to 2.6%.
However, the EEF said the sector was still in “positive territory”, though had fallen to its lowest levels in several areas since the first quarter of 2013.
