UK Budget tax cuts could help pharmaceutical industry
Will provide incentive to invest and create wealth in the UK
The cut in corporation tax announced in the Budget is expected to help make the UK a more attractive place for pharmaceutical companies to invest, do business and create jobs.
‘An extra 1% off corporation tax this year could make a big difference to investment intentions,’ said John Cridland, CBI director-general. ‘It puts a rate of 20% within our reach.’
He also said that plans to reduce the top rate of tax to 45p by April 2013 would show ‘best and aspiring talent’ that this Government wants them to create wealth in the UK.
However, he said smaller businesses might not feel that things were much different in the area of deregulation and it would have also have been a ‘huge relief’ if the Chancellor had taken the opportunity to get rid of the ‘currently unworkable’ Carbon Reduction Commitment.
Stephen Whitehead, chief executive of the Association of the British Pharmaceutical Industry (ABPI) agreed that moves towards a more competitive tax regime, including reducing corporation tax so that the UK has among the lowest rates in Europe (22% by 2014), were welcome.
‘Our industry is of huge importance to the UK economy, generating a trade surplus of £7bn every year and employing 67,000 people directly. The Government has long recognised our contribution and we appreciate their ongoing support with initiatives like the patent box and the more recent measures announced in the Strategy for UK Life Sciences and the Innovation, Health and Wealth review of innovation in the NHS.’
‘Looking beyond the Budget, it is essential that recognition is given to the importance of a strong commercial environment for industry, where the uptake of new innovative medicines is ensured and pricing rewards innovation,’ he said.
Glyn Edwards, interim chief executive of the BioIndustry Association (BIA), added that the Government’s plans to help the commercialisation of research, invest £100m in new university research facilities and increase the Enterprise Management Incentive Scheme grant limit were also encouraging.
Steve Elliott, chief executive of the Chemical Industries Association (CIA), welcomed the support for r&d, but was ‘gravely disappointed’ that no equivalent support had been given to encourage capital investment.
‘Manufacturing must renew its plant and machinery to remain competitive and profitable –only then will any lower corporation tax rate be relevant,’ he said.
Elliott welcomed the measures to encourage investment in the energy sector, alongside protecting the science budget to support UK innovation and promoting exports – where the chemicals industry features strongly.
In common with the CBI, Elliott welcomed further moves to simplify the Carbon Reduction Commitment, but emphasised that it was important to ensure that any replacement environmental tax in the future did not increase costs for energy intensive industries that already face higher energy costs.
- Companies:
- ABPI Association of the British Pharmaceutical Industry
- Chemical Industries Association
- BioIndustry Association
