Ease the pressure of rising energy costs
The Food and Drink Federation (FDF) has called for more investment in our energy supply. Costs are estimated to rise by as much as 40% from the combined effects of wholesale energy price rises, the impacts of carbon price support and the EU Emissions Trading Scheme.
A spokeswoman from the FDF told FoodManufacture.co.uk: “To ensure security of supply in the short-term and low carbon electricity generation in the long-term, it is essential that electricity generators receive the right signals from the Chancellor to incentivise them to invest in new generating capacity.”
Control inhibiting regulation
The British Retail Consortium has called for a ‘One in, Two out’ approach to regulation. That would ensure the regulations being scrapped benefit the same sector that is suffering the new rules being imposed. It suggested the application of a ‘growth test’ for new regulation to stop growth-inhibiting regulation.
Encourage more lending
Businesses are struggling to get the finance they need because the banks aren’t lending. Julian Wild, food group director at legal firm Rollits, hopes that the government will take steps to encourage lending such as simplifying the Enterprise Investment Scheme. This would use tax relief as an incentive for investors to fund small business projects, he said.
Make a clear plan for the Business Bank
The Federation of Small Businesses (FSB) has called for key plans for the new institution the Business Bank to enable easier access to finance and open up competition in the banking sector. The Confederation of British Industry (CBI) asked for it to be used as a one-stop shop for exporters and a source of patient (long-term) capital for growing firms while supporting the development of alternative forms of finance.
Make it easier to export
The FDF has called for simplification of government-backed finance schemes that make it easier for firms to export. A spokeswoman said: “UK food and drink manufacturers have enormous potential to grow through exports but many firms cite finance as a critical barrier to accessing foreign markets.”
“Stop taxing our roast chicken!”
Last week (March 13) the British Poultry Council (BPC), Morrisons and a cross-party group of MPs delivered a petition of more than 50,000 signatures to the Treasury requesting that the tax on rotisserie chicken be reversed.
The VAT, which was introduced in the 2012 budget, has caused a fall in rotisserie chicken sales of around 18%, with the Treasury pocketing around £13.3M in VAT since the tax was introduced. The BPC and Morrisons have questioned the real benefit of the revenue to the Treasury.
Encourage further capital investment
Wild is hoping that the government will extend its increase of the annual tax allowance against investment, which was temporarily increased up to £250k. “This may well be extended indefinitely to make further investments in plant and machinery more tax efficient,” predicted Wild.
Remove Stamp Duty on shares
The CBI has called for further action to ensure that equity finance is attractive to high-growth firms by removing Stamp Duty on shares listed on the Alternative Investment Market – a key source of non-bank equity finance for mid-sized businesses.
Cap tax rates
Capping the business tax rate at 2%, instead of pressing ahead with the planned rise to 2.6% in 2013 at a cost of £14M would make the UK more internationally competitive, according to the CBI. It said such a move would also help to safeguard jobs on the UK’s high streets
Help small firms
The R&D tax credit system doesn’t suit the needs of small and medium-sized businesses, according to the FDF, which would like to see a more flexible approach. The current proposal to allow small firms with a turnover of less than £77,000 to provide cash-based accounts is a major deregulatory stop that will increase compliance, say the FSB.
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Industry Wish List – in quotes
The Chilled Food Association’s director & secretary general, Kaarin Goodburn: “We hope that the government recognises and acts to mitigate heightened pressure on industry from rising fuel costs including gas and electricity.”
British Poultry Council’s head of external relations, Caroline Leroux: “It’s encouraging for British poultry producers – who have felt the acute effects of the tax [on rotisserie chicken] – to see that so many people came forward to support the campaign in such a short period of time and we remind the Chancellor not to forget that support in next week’s Budget.”
The Federation of Small Businesses: “Not only should he [the Chancellor] set out the role the new institution will have in getting this finance to small firms, he should also show how the bank should help open up competition in the banking sector and encourage non-bank sources of finance.”
The Food and Drink Federation: “A more flexible criteria for SMEs applying for R&D credits will boost innovation and help them exploit opportunities such as the £38M global market for health and wellbeing products,” said a spokeswoman.
Julian Wild, food group director, Rollits: “Corporation tax is currently 23% for large companies and 20% for smaller. There could be a convergence of the standard rate at 20% because companies need help with corporation tax.”
Morrisons’ fresh food director, Jamie Winter: “We’ve been asking the government to reverse this unfair [chicken rotisserie] tax on customers, who don’t eat rotisserie chicken as a takeaway item – even before it was introduced in March of last year. Not only does it cost shoppers more at a time when finances are already tight, there is clear evidence that the tax is also hurting British farmers. The government should support farmers and consumers by reversing this decision once and for all.”
The Forum of Private Business: “While our members support the overall approach of the Chancellor’s speed of deficit reduction, without doubt they need some cash flow favours on Wednesday. Business rates and fuel head the list of businesses biggest costs and some longer term certainty – rather than incremental postponements – over both of those would help enormously. On fuel we would love to see the government get serious on fuel duty, not with just another postponement, but an outright cut to put money back in to the pocket of consumers.
“We know the vast majority of small businesses would also welcome with open arms some form of fuel stabiliser. Not only would this keep the price of petrol and diesel at affordable levels, it would allow SMEs to plan ahead with certainty that there isn’t a huge price spike around the corner as we’ve just seen.”
“On business rates too, the pips are squeaking. Government can’t keep clobbering businesses with hike after hike. It was a case of enough already years ago, and any more increases on Wednesday will be seen as an assault on entrepreneurship, particularly retailers, who are really struggling at the minute.”
Industry’s top 10 Wish List
1. Ease the pressure of rising energy costs
2. Control inhibiting regulation
3. Encourage more lending
4. Make a clear plan for the Business Bank
5. Make it easier to export
6. Reverse the tax on rotisserie chickens
7. Encourage further capital investment
8. Remove Stamp Duty on shares
9. Cap tax rates
10. Help small firms via tax credits and deregulation