Budget 2009: reactions from the packaging industry

Darling unveiled the scheme yesterday during his much-anticipated speech, with the government offering to match private sector trade credit insurance provision, for a temporary period, if insurers reduced cover to UK businesses.

Packaging Federation chief executive Dick Searle welcomed the news, in recognition of the fact that credit insurance has proved “a significant issue for the industry” in recent months with many companies having been refused cover.

“My fear is that it will take too long to be implemented,” said Searle. “The crisis is out there now so we need action now.”

David Tyson, chief executive of the Packaging and Films Association, agreed that the announcement was a positive step, but added that government needed to “make it simpler for businesses to understand”.

Tyson was also keen to highlight an additional £260m to be invested in training to ensure skills are in place “when the upturn comes”. From January, under-25s who have been out of work for 12 months will be offered a job or a place in training.

Partner at financial consultancy Europa Partners Nicholas Mockett warned that high-earning entrepreneurs would be hit by Darling’s headline measure of a 50% tax rate for those earning more than £150,000 a year, and could be less inclined to invest or create jobs as a result.

However, he added that by maintaining stamp duty exemption for homes purchased for less than £175,000, the government had encouraged people to buy property and “spurred people into consuming”, purchasing products from packaging industry clients in the home, food and entertainment sectors.

Mockett cautioned that an increase in fuel duty by a further 2p a litre could also have a negative impact on the packaging industries transporting these consumables around the country.

“This is particularly true for packaging where they are ‘shipping air’, as is often said of the corrugated industry and plastic bottles,” said Mockett. “Hole-in-the-wall suppliers should therefore have an advantage.”

Meanwhile, the British Plastics Federation welcomed the Chancellor’s inclusion of a climate change agreement clause, based mainly on electricity, which will give the body “a second chance” to get discount for the plastic processing industry.

See Packaging News‘s live coverage of yesterday’s Budget speech to read more details on the announcements as they unfolded.

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