George Osborne told a packed and noisy House of Commons that the UK’s economy is heading in the right direction but what changes has he put in place to help UK manufactures and SME’s like Kavia Moulded Products. We now know our injection moulding manufacturing has become more competitive to offshore solutions if you read an earlier posted article here, but what can the government do to further stimulate manufacturing?
Of course we need consumers to be spending but putting that aside what is going to directly affect manufacturing? His solutions are:
- Scrapping job taxes for SME’s
- Cut of corporation tax, down to 20%
- Rise in income tax allowance
- Scrapping fuel duty
- Growth vouchers for SME’s
- Support for energy intensive industries
Taking bulleted the points in the order above, scrapping job taxes – it was presented this could be as much as £2,000 per employee taking some pressure off the bottom line along with the improved corporation tax rate.
The rise in income tax allowance are welcomed by every employee because costs everywhere else are rising in goods, energy and fuel. Scrapping the fuel duty helps everybody and controls rising costs on delivery as recently geographic location of your injection moulding partner has become more prevalent. Kavia is based in Todmorden, West Yorkshire close to the M62 and M6 corridors and less than hour west of the M1 corridor.
The British Chambers of Commerce proposed the scheme back in September that required £100 million and in the budget this has been backed with an initial £30m by Chancellor that translates into typically £5,000 grant for a small business to get advice on how to grow their business. The advice services will be focused on:
- Legal, HR and accountancy
- Access to finance
- Business planning
- Workforce training
Kavia has made a significant investment already by employing a business development manager and are currently running a business growth plan but would welcome any external funding and support to market our new products and enhance the skills of our loyal workforce that has an average time served of 13 years.
The support for energy intensive industries is unlikely to benefit Kavia as it seems to be directed at the new shale gas sector but electricity prices have been steadily rising year on year and is a large proportion of the manufacturing costs of an injection moulded component. Also on components greater than 50g, typically half the cost is raw material and this continues to rise whilst our customers are still benefitting from price stability from Kavia Moulded Products.
Although Kavia welcomes many of the budget changes it is still up to us to help ourselves as some of our customers have had significant drops in sales. We are doing this by trying secure new customers with good growth track records in sectors less sensitive to nationwide and global downturns. These companies in-turn are seeking injection moulding partners offering good service, added value services, financial stability and innovation up the supply chain to keep everybody competitive and growing.
The Kavia management team has a considerable amount of industry experience and an innovation track record that enhances our services whilst adding value to our customers. Please call or contact our Business Development Manager Iain Hill to discuss further, look forward to hearing from you.