Chancellor announces measures to support manufacturers and exporters

Published 19th Mar 2014 by Events

In his 2014 Budget the Chancellor has announced measures to support exporters and manufacturers, including extensions to increased rates of capital allowances, business rates relief and a boost to the Government’s Export Finance support packages.

Earlier this month our policy team wrote to the Chancellor urging the Government to consider wholesale reform of business rates, greater support for exporters and an extension and expansion of capital allowances. 

It is encouraging to see much of this included in the Chancellor’s Budget Statement, with many of these recommendations echoed at least in spirit if not in detail. 

In what has broadly been defined as a business-friendly budget the Government put rebalancing the economy towards manufacturing and exporting at the heart of the agenda. With wide-ranging detail covering national insurance contributions, infrastructure, exports, research and development, taxation and more Chancellor Osborne announced a package of policies which will be welcomed by businesses seeking greater support to grow.

Among the announcements welcomed by businesses are:

  • National Insurance Contribution exemptions to be expanded to all under 21 year olds 
  • An expansion of Capital Allowances on Plants and Machinery to £500,000 and an extension of this policy to 2015
  • £20m Regional Air Connectivity Fund to boost regional airports 
  • Reduction in some rates of Air Passenger Duty 
  • Greater funding for exports through UK Export Finance, doubling to £3bn the fund and reducing the interest rates for companies 
  • Cancellation of the September fuel duty rise 
  • Compensation scheme for energy-intensive industries extended 
  • £7bn package to cut energy bills for manufacturers 
  • New graduate level apprenticeships to be developed 
  • Business rates relief worth upto £1,000 for retailers, pubs and restaurants with a rateable value of upto £50,000

Full details of the Budget can be found on the treasury website.

Chamber Head of Policy Steven Leigh commented: 

“There is much in this Budget to reassure businesses, with greater support for exporters and manufacturers particularly helpful. It is encouraging to see many of the policy recommendations we have made in the past being echoed in the direction of this budget, and there is a clear pro-business spirit in evidence. In some cases, for instance on business rates relief, there is further room for action and we will continue to make the case for wholesale reform.

The Government is right to provide greater support for manufacturers and exporters in order to achieve the much-promoted rebalancing of the economy. Increased funding for UK Export Finance and reduced interest rates on UKEF products will make British export finance the most competitive in Europe. In addition, expanded Capital Allowances will encourage manufacturers to invest in new plant and machinery, and by saving businesses money will free up finances to create jobs and growth. 

We have long lobbied for reform of national insurance contributions, particularly for young people, arguing that employer’s contributions represent a tax on creating jobs. At a time of high youth unemployment this seems perverse. It is encouraging therefore to see the Government announce plans to exempt all under 21s from employer’s contributions.”

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