On March 15, the UK government’s chief finance minister - Chancellor of the Exchequer Jeremy Hunt - opened his first full Budget speech by declaring that it was “a budget for growth”, emphasizing that this would be “long-term, sustainable, healthy growth”. The Office for Budget Responsibility has reported that there is unlikely to be any growth in 2023 but that the UK is likely at least to avoid a recession.
After the turmoil of four Chancellors of the Exchequer and three fiscal statements in 2022, it was to be expected that Mr Hunt would try to avoid too many surprises. Even so, there were some striking headlines on tax: the abolition of the limit on tax-favoured pension savings and the introduction of unlimited 100% deductions against profits for company investment in new plant were more generous than most predictions.
There were measures to encourage “economically inactive” people back into the workforce, ranging from increasing the provision of free childcare to the introduction of “returnerships” - apprenticeships for people over 50.
From April 1, the Corporation Tax rate will increase from 19% to 25% for companies with profits over £250,000. Since April 1 2017, all corporate profits have been taxed at the same rate; the “small profits rate” that was familiar before then will be reintroduced at 19% for companies with profits of up to £50,000.
Non-ferrous traders and merchants are reporting that business is currently not easy in the UK; while ferrous supply and demand appear reasonable, the same cannot be said for non-ferrous. There is a lack of availability in the marketplace, with suppliers reporting reduced tonnages supplied in the last four to six weeks. They continue to see their regular clients, but they are either delivering less weight or are coming less frequently. The recent falls in LME prices for copper and aluminium are not helping matters either. Demand for non-ferrous metals, principally in Europe, remains reasonable and there continues to be interest from Asia, although this very much depends on which grade or quality is being offered.
Although the UK economy is not technically in recession, recent economic figures show no or very little growth and so not much material is being generated for recycling. The increased costs of staff, power, fuel and raw materials have led to a slowdown in activity and caused a number of projects to be postponed, at least in the short term. Said projects would have undoubtedly generated metal that would have come through to merchants and consumers. The high energy costs are also making some consumers cautious when quoting for certain grades.
If inflation and interest rates begin to come back down, hopefully this will allow the economy to start to recover, thereby improving supply. Presently, UK scrap merchants’ main comment is that they are managing to stay busy enough to cover costs, but not much more.