Firms call for Budget break

Struggling manufacturers are facing a ‘creeping onslaught’ of costs that is making the country less competitive, the government has been warned.

the EEF lobby group, which represents uK manufacturing, claimed that the new apprenticeship levy and green taxes posed a threat to the economy.

it urged Chancellor george Osborne to use his Budget next month to signal to business that recent increases in costs are not ‘the thin end of an everthickening wedge’.

the Chancellor last week said he will need to make a fresh wave of spending cuts in the Budget on March 16 to balance the books.

He blamed ‘storm clouds’ in the ‘turbulent’ global economy.

the warning from the EEF came as it found that the proportion of companies that view the uK as a competitive place to do business has fallen from 70pc to 56pc this year.

EEF chief executive terry Scuoler said: ‘While many of the risks we are facing stem from challenges in the global economy, companies are increasingly concerned about the creeping onslaught of taxes and policy decisions falling at the door of employers.

‘While, on their own, individual policy decisions may not be significant, taken together they are adding significant cost at a time when business conditions are, to say the least, volatile.

‘With investment intentions looking more fragile, the Chancellor should plot a course that avoids piling more costs on employers and one which gives manufacturers the certainty to invest for the future.’

He added: ‘We are concerned that the additional costs we face after just six months of this Parliament could be the thin end of an ever-thickening wedge.’

in a separate submission to the Chancellor, the Federation of Small Businesses warned ‘confidence is cooling’. it said that costs are being driven up by the introduction of the national living Wage in April, pension auto-enrolment and changes to how dividends are taxed.

Mike Cherry, policy director at the FSB, said: ‘in this climate, it’s crucial that the Chancellor uses the Budget to reassure small firms and boost their confidence so that they invest, create jobs and drive economic growth.’