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Food industry responds to the budget

22 March 2012

The Food and Drink Federation (FDF)’s Director General Melanie Leech has responded to the Chancellor's budget. Here is what she had to say...

Energy
“At best this Budget is a mixed bag on energy. We had hoped for greater clarity around future energy and emissions policies to enable better business and investment planning. Although plans to simplify the Carbon Reduction Commitment (CRC) are welcome, it is regrettable that the Chancellor did not go further and scrap it altogether.”

“Furthermore, the positive effect of not applying carbon price support charges to fuels used for Combined Heat and Power (CHP) is offset by the decision to remove the associated Climate Change Levy (CCL) exemption certificates. And continuing with the doubling of the carbon price support charge itself will hit many food manufacturers hard in difficult trading conditions”.

Regulation
“We welcome the proposed review of regulation of small businesses in food manufacturing. As a major employer in the UK we also welcome the Chancellor’s plans to significantly deregulate employment law. The cumulative burden of over 160 employment regulations is having a negative impact on sustainable growth and jobs. This action could move us much closer to developing a more flexible UK labour market and accelerating growth in the food industry.”

R&D Tax Credits
“R&D is vital for to the growth of our industry and we welcome the change from a deduction to an above the line tax credit. We hope that the Chancellor’s commitment to increase funding for the scheme will broaden its reach and allow more manufacturers to increase their investment in R&D, thus driving innovation in the industry.”

Access to finance
“The SMEs which are the backbone of the food and drink industry need working capital to grow their businesses and capitalise on opportunities in foreign markets. The Chancellor’s plans to invest in non-bank finance schemes, as well as the new National Loan Guarantee Scheme, should provide welcome support to SMEs to realise their growth potential.”

Corporation tax and Capital Allowances
“We are pleased that the Chancellor has accelerated the rate at which corporation tax will be reduced. We are however disappointed to see no change to the main Capital Allowances scheme, which is a major barrier to investment in manufacturing in the UK.”


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