ECA Chairman David Pollock responds to the Pre Budget Report

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05/01/2010

“In his Pre-Budget Report, the Chancellor has failed to take seriously the plight of UK business and, to some extent, appears to disadvantage it. Actions speak louder than words; despite saying it will support small business and push its skills agenda as a priority, the Pre-Budget Report clearly shows that the Government is failing to do this.

“We strongly believe that Government had two key opportunities to support industry. First, by giving a break in National Insurance contributions for each apprentice a company trains. However, the Chancellor’s move to increase rather than decrease National Insurance contributions, will not only add to the financial burden, particularly for the SME, but will further discourage employers from hiring.

“We believe that a break in National Insurance would have bolstered Government’s apprenticeship and vocational training schemes, while safeguarding the future of the industry. By increasing the liability, the Chancellor has dealt a blow to an industry desperately trying to preserve its long term future.

“Second, rather than increasing VAT back to 17.5%, we had hoped that the Chancellor would reduce VAT to 5%, applied to repairs, maintenance and improvements as permitted by the EU member states’ Finance Ministers. This move would have tangibly stimulated the industry and deterred homeowners from using unskilled ‘cowboys’ rather than qualified contractors to make a quick saving.

“SMEs are facing the brunt of the recession so we welcome the Chancellors decision to defer the proposed small business corporation tax increase.

“We are pleased that the Chancellor has agreed to reward households taking action to support its green agenda. The £900 per year tax break to those fitting solar or wind power energy generators to their homes, who then feed their excess energy back to the National Grid, is a great start. However, feed-in tariffs will need to be set sufficiently high to further encourage take-up and create jobs in the sector.

“The Chancellor’s new boiler scrappage scheme which aims to help 125,000 households replace their old boilers with new, more efficient models is welcome. However, we believe this doesn’t go far enough. We would like to see this scheme extended to encourage people to upgrade all white goods to top performance appliances in return for a ‘scrappage’ allowance equivalent to VAT.”