BPF Reaction to Pre-Budget Statement

At a time of unprecedented economic and consumer gloom the Chancellor of the Exchequer Alastair Darling yesterday presented his Pre-Budget statement. The British Plastics Federation led 8 Association Alliance made proposals to the Chancellor on 21st October.

Peter Davis, Director General of the BPF said, “We welcome the VAT reduction until December 2009 to stimulate consumer demand.  However, we do have the most indebted households in Europe, owing £1.3 trillion so they may feel reluctant to spend.”

He added, “We welcome from January the offer of short term working capital from Export Credit Guarantee Department to help Exporters. We also welcome the extra £100 million for the energy saving programme.  Cavity wall and loft insulation should benefit plastics companies.”

“We called for the small Company Corporation tax 1% increase to be reversed.  We welcome the Chancellor’s decision to do this but regret it is only delayed for a year.”

The BPF welcomed bringing forward £3bn of Capital Spending for housing and other construction projects.

Disappointment

Peter Davis said, “To help the struggling car industry and its suppliers, whose sales of new cars have fallen 23% we had called for the Vehicle Excise Duty and Fuel Duty increases to be scrapped. We are disappointed that Fuel Duty of 2p litre will go up from next week adding to company’s transportation costs.  It’s also disappointing that the V.E.D. increases will go ahead but at a lower level.”  The UK has the highest levels of Fuel Duty in Western Europe.

The BPF called for the Climate Change Levy on businesses to be suspended or halved.  The Chancellor’s Report does not do this, but there is no mention of CCL increase next year.

Increasing employee and employer National Insurance rates from April 2011 is condemned by the BPF.  Peter Davis said, “We do not agree with the Government’s optimistic prediction that the economy will pick up mid 2009.  Increasing NICS in 2011 will hit everybody when the economy will be recovering.”

The BPF is disappointed that the Chancellor did not do more to stimulate the Housing market.  Peter Davis said, “There’s some help for homeowners in difficulty but nothing to financially kick start a market where there is a huge demand for more housing from mass immigration and demographic change.”

The BPF welcome the help for SMEs facing credit constraints but feels more could have been done.

Concern over Public Finance and Debt

The BPF is deeply concerned at the huge level of National Debt revealed by the Government.  £78bn this year, double the Chancellor’s estimate in March and a staggering £118bn for 2009-10, 8% of GDP.  The Government say they will not get back into balance until 2015.

Peter Davis commented,” This is an unpleasant surprise and adversely affects the World’s view of Britain’s credit-worthiness. Our structural deficit is double that of France. This could negatively affect the strength of the pound and inward investment.”

The BPF is disappointed that, in order to rein in Public Spending the Chancellor has only found an additional £5bn of efficiency savings.

Peter Davis said, “This is peanuts.  There are 5.8 million public sector employees. There should be an immediate freeze on recruitment except for front line staff such as the military, nurses, fire-fighters and police. A 10% reduction in public sector bureaucrats should be easy to achieve.  For a fraction of the cost Trade Associations could take on many of the business functions of the Regional Development Authorities who do not represent good value for money.”

ENDS . . .

For further information on this press release, please contact Philip Batten, British Plastics Federation, 6 Bath Place, Rivington Street, London, EC2A 3JE, tel 020 7457 5000, fax 020 7457 5045, email: [email protected]

Notes for editors
1)     British Plastics Federation (BPF) is the UK trade association for the plastics industry – representing the whole supply chain including polymer producers, distributors, additives suppliers, machinery manufacturers, processors and recyclers.

2) The Eight Associations are:
British Plastics Federation, BPF   
British Rubber & Polyurethane Products Association, BRPPA
British Coatings Federation, BCF
Packaging & Films Association, PAFA
Gauge & Toolmakers Association, GTMA
Polymer Machinery Manufacturers & Distributors Association, PMMDA
Scottish Plastics & Rubber Association, SPRA
Northern Ireland Polymers Association, NIPA