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[March 2006]
UK Budget Provides Little Encouragement for Product Manufacturers Says CPA
Business competitiveness is likely to be further damaged after the punitive rise in the climate change levy, announced by the Chancellor of the Exchequer in his UK Budget, according to Michael Ankers, Chief Executive of the Construction Products Association (CPA).
"With UK industry paying some of the highest energy costs in Europe, a large number of businesses are facing a triple whammy of high energy prices, participation in the EU emissions trading scheme, and climate change levy. Increasing the levy, which is focused only on UK industry, will do nothing to make our companies more energy efficient and will only encourage them to look elsewhere when it comes to making future investment decisions," said Mr Ankers.The Association does, however, welcome some of the other measures in the Budget to assist industry competitiveness. On this Mr Ankers said: "We are pleased to see the Government remains committed to reducing red tape and to speeding up the planning system. However, we are still waiting to see if these fine words, which we have heard many times before, are followed by effective action. We are also pleased that there is no significant increase in other business taxes, but the Government does need to acknowledge the impact that past tax increases are having on industry. The Chancellor needs to set a clear programme for easing the tax burden on business and not just claim credit for not making it worse."
The environmental theme to the Budget is also one that the CPA welcomed and one that reflects its own priorities. However, the measures fall far short of what the CPA believes is necessary. Mr Ankers made
it clear, adding: "There is an urgent need to make existing buildings more energy efficient, but the Chancellor has missed some great opportunities to provide financial incentives to achieve this. Whilst plans to ensure an additional 250,000 homes are properly insulated, and the £50m additional funding for microgeneration are to be welcomed, these are fairly modest measures given the scale of what needs to be achieved. We want Government to develop a clear long term strategy for making the existing building stock more energy efficient. Within this an important first step would be to encourage householders to upgrade their heating boilers. The financial support we hoped to see in the Budget would have reduced the number of aged boilers still in use by 750,000 and reduce CO2 by an additional 0.5MtC by 2010."The CPA said it was also disappointed that the Treasury had abandoned as unworkable its plan to bring more brownfield sites forward for development through a Derelict Land Tax Credit. The CPA has been pressing for an alternative system of capital allowances for the clean-up costs for such sites and said it would urge the Treasury to revisit these proposals rather than simply do nothing.
On other issues, the CPA welcomed the announcement in advance of the next Comprehensive Spending Review to commit a total of £34 billion towards capital investment in schools, including the building stock.
www.constprod.org.uk
ENDS