Industry bodies welcome export and investment allowance budget changes, but worry over flood measures

Industry trade bodies have welcomed a number of measures in the budget including support for exports, apprenticeships and investment in plant and machinery.

But professionals are concerned it does not go far enough to support green space and flood protection.

Chancellor George Osborne announced a scheme to boost exports - doubling the amount of finance available to £3bn.

Commercial Horticulture Association manager Stuart Booker said: "This is something that has been talked about at UK Trade and Investment and is very positive news and a good opportunity for our industry to take advantage of. We welcome this but we're not sure how it will filter through yet."

A fuel duty rise planned for September will now not happen, something which former BALI chairman and managing director of PC Landscapes Paul Cowell said was "a definite help to firms with multiple vehicles and machinery".

"Any increase in fuel is always going to be a concern to landscapers and business in general as these rises squeeze existing margins on the longer term projects and on general running costs," he said.

"Any fuel increase that is planned is always going to be passed to the consumer but increased costs to business only makes the sale that much harder."

Osborne also announced a new "garden city" at Ebbsfleet in addition to plans for 200,000 new homes.  

Cowell added: "I think it’s good news that a garden city has been proposed - it has only taken a hundred years to realise the benefits but this announcement will work in favour for landscape designers and contractors alike.

"The Government would have to have many more to ease the housing shortage and I will be eager to see the percentage of green space allowed per household or if it is just spin for house building with a token landscape. This will be a good test for the greenest government claim."

Landscape Institute (LI) president Sue Illman questioned whether the Government's £140 million of new funding on flood defence repair would be enough.

Illman said: "While we welcome the monies being allocated, it is as yet unclear whether the £140m identified for this year will be sufficient.  Similarly, we welcome the principle of a long-term strategy but until this is reviewed it is impossible to know that the budget allocation will be adequate against further extreme events.  

"It is easy for people to forget the huge anxiety and chaos caused by the flooding earlier this year, when the spring sun is shining.

"We must have a proper exploration of the larger catchment management issues, and how forestry, land management and soft engineered flood alleviation schemes can hold back water in the upper reaches of rivers."

The HTA particularly welcomed The Apprenticeship Grant for Employers scheme (AGE) being increased by £85 million in 2014-15 and 2015-16 to help businesses grow staff numbers.

AGE's framework means that employers which have not had an apprentice in the last 12 months can access a £1,500 grant for each of up to 10 apprentices aged between 16 and 24 that are taken on. It is aimed at businesses which employ fewer than 50 staff.

Osborne also revealed £20 million of funding, over two years, to support apprenticeships up to postgraduate level.

And the Chancellor’s announcement to double the rate of the Annual Investment Allowance is welcome news but it would have been better if he had made it a permanent fixture, said the NFU.

Osborne doubled the allowance to £500,000 and extended it until 2016 but the NFU says permanence would have helped the industry plan better for the future.

NFU president Meurig Raymond said: "Despite the reasonably good news on the investment allowance for plant and machinery, any incentives for capital infrastructure investment were sadly lacking in today’s budget. This is all the more frustrating given that few farming businesses are in a situation to benefit from the continued reductions in corporation tax.

"While the Chancellor talks about adding resilience and balance to the economy, farmers need to invest in capital items, and not just plant and machinery."

He added: "The NFU applauds the Government’s intention, this autumn, to publish a long-term plan to protect the country from future flooding. Indeed, we highlighted the need for a root and branch review of the government’s flood management policy in the NFU Flooding Manifesto. However, it is not yet clear whether the announcement of £140m of funding to repair and restore flood defences includes or is in addition to the £130m announced in February.

"Also, with a renewed interest in careers in the agri-business sector, the industry will welcome the extension to apprenticeship grants. The challenge for farming will be to get its fair share from the extra £85m that the Chancellor has announced.

"In other good news, the UK drinks industry will be pleased with various measures including freezing duty on Scotch whisky and cider, in which he singled out weather affected cider makers in the West Country."

Direct lending from government to UK businesses to promote exports doubled to £3bn and interest rates on that lending cut by a third.

Business rate discounts and enhanced capital allowances in enterprise zones were extended for three years.

Responding to the budget, Phil Orford, chief executive of the Forum of Private Business, said: "The headlines for business today are on energy policies and export. There are sizeable gains for UK manufacturers here in particular over the next few years. On export the Chancellor has thrown his weight behind getting more businesses exporting. Our membership is confident about growth but much of that growth is UK based so we needed to see such a commitment, though we will continue to work with the Treasury and others to develop even healthier export subsidies for business.

"Overall this was a budget that offers some help to all levels of business, with perhaps a slight focus on the mid-size energy intensive and manufacturing businesses, rather than the very small ones. However, it does help to tackle the cost of energy and makes good on the commitment trailed before the budget to support those that look to invest, either in the UK – with a more extensive Annual Investment Allowance – or abroad, with a £3bn export support budget."

Commenting on the budget, British Retail Consortium director general, Helen Dickinson said: "Our customers will welcome the Chancellor’s focus on putting more money in their pockets through changing the tax thresholds, fuel duty and savings and pensions arrangements. The BRC’s projections demonstrate that whilst recovery is now a tangible trend, progress is still fragile and retail can play a strong role going forward provided that consumers feel confident enough to spend.

"As an industry that employs over one million people under 25, we applaud the Chancellor’s measures to support 100,000 more apprenticeships and the re-confirmation that he will scrap the jobs tax for under-21s. Retail offers young people fantastic career opportunities with great promotion prospects and our members will now be looking at ways to bring even more into our industry."

National Association of Cider Makers (NACM) chair Paul Bartlett said: "It is great news that the Chancellor has abandoned the duty escalator and frozen duty on cider this year in recognition of the important role that cider makers play in their local, rural communities as well as the impact on growers and cider makers from the winter storms and rain."

He added: "As the investment cycle for our industry is measured in decades, we have a critical need for stability on duty and policy and we hope this decision signals a period of sustained support from Government for a great British success story."

He also welcomed the doubling of the Annual Investment Allowance to £500,000 a year, and said of the additional support to exporters: "British cider makers are very active seeking to grow export markets, so this might present a terrific opportuntity for producers and the UK economy."


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