The Chancellor finds himself in an extremely difficult situation as a result of the global credit crunch and is faced with an unprecedented increase in public borrowing (£175bn or 12% of GDP in the year 09/10 and £173bn in 10/11) and a significant drop of 3.5% of GDP for the current year.

Against that background we have to ask whether recent events have meant that we have paid too high a price in supporting the financial sector and that this in turn has significantly reduced the amount of money available to support other key areas of the economy. In particular, I refer to the manufacturing engineering sector.

Despite that, the Chancellor has made a serious attempt to stimulate businesses, particularly those involved in the high technology and energy sectors.

A good example is the £750m for the strategic investment fund aimed at emerging technologies. Further examples include the £525m new support for offshore wind technologies and £405m for low carbon energy projects and a commitment to a new funding mechanism for between two and four demonstrator projects such as carbon capture and storage (CCS).

We also welcome the fact that combined heat and power plants (CHP) will be exempt from the Climate Change Levy.

If these measures have the desired effect and the Chancellor's growth prediction of 1.25% materialises in 2010 then this Budget could prove to be a significant turning point for our manufacturing engineering sector.

For further information contact Colin McGill on 0141 221 3181 or 07976 224412 or visit the Scottish Engineering website on www.scottishengineering.org.uk