UK: Industry urges Chancellor to act on energy, finance, tax
UK Chancellor George Osborne should set out greater "clarity" on energy policy, improve access to finance and create a more "favourable" tax regime, the country's food manufacturers have urged.
In the run-up to the coalition's Budget announcement later today (21 March), UK food industry association the Food and Drink Federation outlined how Osborne could "deliver growth".
The FDF, which represents food manufacturers and soft drink suppliers in the UK, warned that, without changes to government energy policy, costs for the industry could jump.
"UK food and drink manufacturing is an energy intensive industry, and manufacturers are increasingly concerned about the impact of rising energy costs (including transport fuel duties) on their ability to remain competitive," FDF director general Melanie Leech said.
"We hope for greater clarity around future energy and emissions policies, which we hope will enable better business and investment planning. Without policy change, we estimate that our sector could face price rises of up to 40% from the combined effects of carbon price support and the EU Emissions Trading Scheme, which would clearly impact substantially on our ability to fund low-carbon technologies for the future."
Easing restrictions on finance was another measure championed by the FDF. It welcomed yesterday's launch of the coalition government's National Loan Guarantee Scheme, which aims to provide business with access to cheaper finance.
Leech said she wanted to hear about Osborne's credit-easing plans and initiatives to promote sources of finance outside traditional banks. "The growth prospects of food manufacturers, in particular SMEs, are restricted due to lack of working capital to grow their businesses and capitalize on opportunities in foreign markets," he said.
Tax issues will also need to be addressed, particularly around levies on innovation and corporation tax.
"R&D is vital for the growth of our industry, however many of our members, in particular SMEs, tell us that they find the current arrangement on R&D tax credits complicated and difficult to access. Many of our competitors overseas also offer significantly higher rates of relief despite the planned increases to the SME scheme in April 2012, and so we hope that these issues are addressed," Leech said.
She added: "We fully support a further reduction in the 23% corporation tax rate, but believe that the current capital allowance regime is also a major barrier to investment in manufacturing in the UK. A more favourable tax landscape is essential if we are to compete internationally for investment, as well as to sustain and grow the industry domestically."
Sectors: Baby food, Bakery, Canned food, Cereal, Chilled foods, Condiments, dressings & sauces, Confectionery, Dairy, Dried foods, Fresh produce, Frozen, Ice cream, Meat & poultry, Natural & organic, Private label, Seafood, Snacks, World foods
Companies: Food and Drink Federation
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