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British Glass Manufacturers’ Confederation welcomes yesterday’s Budget announcements

British Glass Manufacturers’ Confederation welcomes yesterday’s Budget announcements

The British Glass Manufacturers’ Confederation welcomes yesterday’s Budget announcements – particularly the focus on supporting the growth of the UK manufacturing sector through cuts to energy costs, investment in innovation for SMEs and providing further grants for apprenticeships.

However, whilst the reforms announced will ease the pressure on Britain’s energy intensive industries in general, the glass industry itself, which employs 7,000 directly in the UK and over 45,000 in the supply chain, is not deemed eligible. For example, the Government has said they will extend the compensation for energy intensive industries for the cost of the Carbon Price Floor and EU emissions trading system to 2019-2020, however, the glass industry is not entitled to benefit from this unless they widen the terms to include us.

We also welcomed the introduction of a new compensation scheme to help energy intensive industries with higher electricity costs, however, it is not clear who will benefit from this – is it the energy intensive industry or the electro intensive industry?

On a positive note, Government thinking aligns with our own that manufacturing should be at the forefront of economic development to create a healthy, sustainable and internationally competitive industrial base. Supporting UK manufacturing through raising the rate of the R&D tax credit payable to loss making SMEs from 11% to 14.5% will encourage investment in innovation which is positive news for the sector.

We were initially disappointed to note that there was no mention of the consultation on changes to the glass packaging recycling business target to 2017 or of a reform of the PRN system in the Budget announcement. However, the Government has today (20 March) announced that they will be reducing glass packaging recycling targets to 75% this year from 81% – this target will rise 1% per year up to 2016. Having been involved in the consultation process, working closely with Defra, WRAP and Valpak Consulting, we are pleased to see that Government have taken our recommendation to lower the glass packaging recycling business target to 75% and amend the split between remelt and aggregate. We also recognised the need for increasing targets to generate growth in recycling and infrastructure and we welcome the proposed 1% increase each year in line for 2 years in line with the Annual review of data.