Chief Executive, Steve Elliott of the Chemical Industries Association (CIA) says we still lack a joined-up and long-term Industrial policy to convince business that government ‘unashamedly backs business’
Responding to today’s Budget Statement, the CIA welcomes the Chancellor’s measures to encourage investment in our energy sector, alongside protecting the science budget to support UK innovation and promoting exports – where the chemicals sector features strongly.
Energy and climate change policy
“We are pleased at the announcement of exemptions from Carbon Price Floor (CPF) on inputs to heat from our on-site Combined Heat and Power (CHP) generation and the good news that competitiveness impacts from CPF on both our electricity and heat users are being recognised.” Says Elliott
But, government must make further progress towards a comprehensive strategy for energy intensive industries (EIIs) like chemicals to ensure we can sustain our contribution to greening the economy as it decarbonises.
I urge Government to start by re-incentivising CHP, which is key to carbon reduction in industry, and confirm strategies for reducing Electricity Market Reform impacts on EII’s power prices when these reforms are announced.
Carbon Reduction Commitment
“We welcome further moves to simplify the Carbon Reduction Commitment, however it will be important to ensure that any replacement environmental tax in the future does not increase costs for energy intensive industries that already face increased energy costs”
Taxation
“It is great to see “above the line” R&D tax credit will be introduced, providing critical development support when businesses are in a loss making phase. Linked to this point it was also good to see greater encouragement for university spin-outs – start ups – through an enhanced Enterprise Management Incentive Scheme grant.”
Investment
“Although we welcome support for Research and Development we are gravely disappointed that no equivalent support is given to encourage capital investment”. Steve stresses.
“Manufacturing must renew its plant and machinery to remain competitive and profitable - only then will any lower corporation tax rate be relevant”
Regulation
“We are pleased to hear the chancellor will launch sector-based reviews of regulation from April 2012 to ensure enforcement is at the lowest possible cost to business, starting with chemicals”.
Steve adds “The need for many of these measures is, however, a manifestation of something that has been sorely lacking in the UK for many years – namely an integrated and cross-party industrial policy giving long-term predictability and confidence to those businesses and sectors where the UK has a comparative advantage”.
He concludes “Today’s budget a positive step forward but more ambition is required if we are to compete in the long run on the international stage”
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Notes to Editors
1 The Chemical Industries Association is the trade body that represents chemical and pharmaceutical businesses located in the UK
2 Steve Elliott’s biography is attached http://www.cia.org.uk/Newsroom/PhotosandBiographies/StephenElliott.aspx
3 The Association has led the campaign on energy, research & development tax credits and capital allowances being critical to industrial growth in the UK
4 For an interview with Steve please contact him on 07951 389621, email - [email protected] or try Simon Marsh on 07951 389197 - [email protected].