Budget 2014: Bentley to export engines as Osborne hails 'makers'

Bentley will begin exporting engines from the UK for the first time in its history, the car company said on Wednesday, in a timely announcement made just before the chancellor unveiled a slew of goodies for manufacturers in a Budget aimed at "the makers and exporters".

George Osborne, chancellor, doubled funding available to exporters and cut interest rates on the finance to levels the government said were now the best in Europe, and increased the investment allowance in an attempt to boost the UK's trade which lags behind rivals, especially to growth markets such as India and China.

"We are backing our exporters so that wherever you are in the world you cannot fail to see 'Made in Britain'," Mr Osborne said.

Bentley, owned by Germany's Volkswagen, will this year become the only producer of 12 cylinder engines for the entire VW Group, sending its 'Made in Britain' engines to companies such as Audi, creating 100 jobs and moving production from Germany.

"This is an important step, not just for Bentley but also for the UK manufacturing sector," Wolfgang Schreiber, Bentley chief executive, said.

Mr Osborne on Wednesday doubled the UK's export lending programme to £3bn and said the government would cut interest rates to the lowest permitted levels, in an effort to help British manufacturers win contracts and expand overseas.

Tony Attard, chief executive of Panaz, a textile maker in Burnley, said he had never used export finance because of its price. However, news that the interest rate would be cut by a third could encourage the £16m turnover business, which exports to China among other places, to use government funding.

"I was really encouraged by the Budget," he said. "The increase in capital allowance has huge implications." His company invests at least £250,000 a year to stay competitive.

Mr Osborne also announced a doubling of the government's annual investment allowance to £500,000 from April 2014 until the end of 2015, a step that will allow for full relief on investments in plant and machinery for almost all of the country's businesses.

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Elaine Moore, FSB chairman in Merseyside, West Cheshire and Wigan, said: "Paving the way to making international trade more open to even the smallest firms is of central importance to help them achieve these ambitions and drive economic growth."

Terry Scuoler, chief executive of EEF, the manufacturers' organisation, said: "The chancellor said this would be a Budget for manufacturers and he has delivered on his word."

The coalition government has consistently stressed its desire to rebalance the economy away from a reliance on financial services and towards manufacturing, which fell from accounting for 19 per cent of the economy in 1997 to 11 per cent in 2008.

Imports exceeded exports in 1998 and have continued to do so since. The chancellor appears set to miss his target to double exports by 2020. British exports will have to grow at 10.4 per cent for the next seven years to hit the target, according to the EEF manufacturers' association. In 2013, exports grew by just 1.4 per cent.

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