STEEL chiefs have given their reaction to George Osborne's budget expressing relief there will be no fundamental overhaul of the business rates system - but warning the Government may seek more revenue from plant and machinery.

EEF, the manufacturing organisation, speaking on behalf of the steel industry, said business rate bills look set to increase less sharply in the future.

EEF Chief Economist, Ms Lee Hopley, said: "Industry will be relieved that there is no fundamental overhaul of the business rates system and that bills look set to increase less sharply in the future.

"However the Chancellor's decision to remove cheaper properties from paying business rates only increases the burden on seeking revenue from plant and machinery included in calculations.

"Yesterday's measures maintain business rates as a tax on investment and may add greater uncertainty to local authority budgets in the future given their now increased dependency on plant and machinery for future revenues."

Terry Scuoler, Chief Executive, said the Chancellor "heeded business warnings of no major new policies which will add to costs already in the pipeline, particularly as manufacturers are at the sharp end of many of the big global challenges he alluded to".

"The icing on the cake would have been setting these in the context of a broader strategy for industry which still remains a gap in the government's armoury," he said.

He also warned the consequences of leaving the UK would be "highly damaging" and said the Chancellor was right to reinforce the importance of Britain remaining in the EU.

He added: "The continued inclusion, however, of investment in plant & machinery in business rate calculations is a disappointment for the steel industry in particular. Government will need to do more to support steel this year."

Richard Warren, EEF's Senior Energy Policy advisor, said of the Government's response to the Business Energy Efficiency Taxation Review: "Manufacturers will be enormously pleased to finally see the back of the CRC energy efficiency scheme, a vastly overcomplicated tax that has had a negligible effect on energy efficiency improvements in industry.

"We would have liked to see the government go further, however, and relinquish the revenue stream attached to this scheme, but do at least welcome the government's clear commitment to make changes to the Climate Change Levy in a genuinely revenue neutral manner.

"Continuation of the Climate Change Agreements for all sectors is extremely welcome.

"The scheme strikes the correct balance between penalty and reward, working with the grain of business to drive investments in energy efficiency.

"Just as importantly, the scheme is an essential element of the package of measures protecting our most energy intensive industry from uncompetitive energy prices. Government is to be congratulated on listening to the concerns of industry and refraining from unhelpful reform."

Mr Warren said they had been hoping for "something more radical on the Carbon Price Floor itself, (but the) commitment to continue the current freeze to the support rates beyond 2019/20 is welcome.

"With UK electricity consumers currently saddled with a carbon price some four to five times higher than consumers elsewhere in Europe, there can be little justification for a resumption of its original trajectory," he said.

"We will continue to call for its phasing out but today's announcement at least provides manufacturers with some certainty on cost stability for the remainder of this parliament."

 

Source : scunthorpetelegraph.co.uk

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