The industry, along with much of UK plc, found the chancellor’s budget as disappointing as it was alarming. It set out not the just the Labour manifesto for the next election, but Gordon’s manifesto for the Labour leadership.

The headlines were depressing for businesses.

The 1% increase in employers’ National Insurance contributions, levied from April next year, has been described by some observers as a tax on jobs. This criticism seems particularly apt since the increase followed the unprecedented 10% rise in the National Minimum Wage the previous October.

Tinkering with the VAT regime and reductions in small companies’ corporation tax made for good soundbites, but as they affect only the very smallest companies, few will see any real benefit, particularly in view of the cost of other measures.

For our industry, the budget was a missed opportunity to amend the regulations surrounding the Climate Change Levy.

TSA estimates that the businesses in our sector have seen energy bills rise by 15% since the levy’s introduction in April 2001. Corresponding savings in employer National Insurance contributions are estimated to be worth less than a third of that figure.

Industries whose processes are governed by the Integrated Pollution Prevention and Control Directive are entitled – through their trade associations – to negotiate tough emission reduction targets with Government and in return to benefit from an 80% reduction in the Climate Change Levy.

The TSA has repeatedly urged that the special circumstance of the textile rental industry be recognised and that, exceptionally, it be allowed to negotiate a Climate Change Levy Agreement. It put its case at a meeting with Treasury ministers last year, with key members of Parliament at a House of Commons reception in November, and again in a strong pre-budget submission to the Chancellor last month.

We had detected signs that the Treasury view was softening on industries such as ours in negotiating discounts. But both Gordon Brown and the 700-page Finance Bill to enact the budget were devastatingly quiet on this important topic.

Worse yet we have had no real encouragement that the Enhanced Capital Allowances Scheme would be extended to cover substantive pieces of laundry equipment, although water savings have been recognised as an appropriate environmental objective.

The CBI estimates that the budget will deliver net “costs” of £4billion a year. Reminding you that textile services alone faces £5.7million, we say: “Cheers Gordon!


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