A grossly imbalanced economy is now paying the price, says MTA
Published : November 25, 2008
The Manufacturing Technologies Association (MTA) reacting to the Pre Budget Report (PBR) said that the size of the proposed borrowing required for the Government's plans would shock our members. The MTA believes we in the UK are paying the price of an economy that has been grossly imbalanced between the service and manufacturing sectors for over thirty years and there was nothing in yesterday's package from the Chancellor to change this in the future.
The much-heralded VAT reduction will have little or no effect on the business of our members. The changes in corporation tax, empty property tax and income shifting tax rises have only been deferred for 12 months. The rise in national insurance contributions promised in 2011 is a tax on jobs, which will stifle recovery. The rise in fuel duty will have an adverse effect on our members. The help for Small to Medium Size Enterprises (SMEs) is welcome but MTA was disappointed that the Chancellor did not do more to force the Banks to start loaning again to SMEs and ensuring that overdraft fees were maintained at a reasonable level.
MTA President Bob Hunt commented on the PBR, "The Chancellor's statement has shown us what a truly awful mess we are in as a country. We at MTA believe that much of this could have been avoided if we had over the years had a more balanced economy between manufacturing and the service sector. The proposals in the PBR have done nothing to change this. In fact there is little to help business and it looks as if we will be paying for it in years to come.
However this is not a manufacturing led recession. Although we now believe that our own manufacturing technologies sector will be in recession in 2009 we still believe that we are well placed to be one of the sectors to help lead the country out of recession, especially as many of our end-users are still showing good levels of activities, we expect new growth areas such as renewable and nuclear energy and all exporters are benefiting from the weak level of sterling . We will rise to the challenge - the question is will the Government?".
