Industry urges Chancellor to set long-term vision to build confidence

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Government urged to work with business and end the blame game

UK manufacturers are urging the chancellor to use his upcoming spending and budget review to lay out the government’s long-term vision for the economy to help boost recovery and business confidence.

The call was launched by Make UK by publishing its own immediate and medium-term priorities to boost investment. In its submission, Make UK sets out its own views on how the UK can successfully transition to a digital and green future, as well as a vision for Global Britain and what this means for manufacturers. British.

Make UK added that given the abandonment of an industrial strategy, in order to encourage boards of directors to make the crucial decision to invest in the UK, and not abroad, a long view run of the economy and industry is vital for investors to retain confidence in Britain.

Make UK has also urged the government to move away from Brexit itself and end the blame game with businesses on the current significant challenges. Instead, Make UK calls on the government to step up its work in partnership with business and industry, as it is doing in some areas, to address these challenges in the short, medium and long term.

In addition, Make UK pointed out that far from relying on cheap labor, the manufacturing industry is a highly skilled sector that invests in its workforce and already pays above the national average. for the whole economy. Even during the worst time of the pandemic, 57% of companies planned to hire an apprentice while 47% intended to do so this year.

Commenting, Stephen Phipson, Managing Director of Make UK, said:

“Industry is vital to the future of any new economy. It will also be the solution not only to the great societal and environmental challenges we will face in the future, but also to the need to concretely improve living standards across the UK.

“To encourage investment in the technology and skills we need to make this realistically happen, the government needs to set a long-term vision for the economy that works with the grain of business to promote the growth and wealth creation, not against it.

“Right now the industry feels that the government is still fighting the last war and sees business as the enemy within. Business has evolved and the government must do the same, working in a spirit of partnership with industry to develop a longer-term economic plan whose fundamental principle is the creation of businesses and wealth. Growth is the right way to make the most of the opportunities available to us and get the job done. “

According to Make UK, while the manufacturing sector is expected to experience strong growth this year of 7.1% and 4.2% in 2022, the government’s decision to increase the tax burden on manufacturers means the sector will not simply rebound. to what it was before. the pandemic. Additionally, history suggests that job cuts are more likely when the economy begins to open up again after a downturn, as businesses need capital to reset.

According to Make UK, it is therefore essential that the government recognize the significant challenges facing the industry and work with the sector to put in place the immediate, six-month and twelve-month measures necessary to ensure that the sector can recover, invest, and grow over the next decade.

This involves focusing on creating a conducive business environment that unlocks new investment and generates income from growth rather than increasing the tax burden on businesses. In its submission, Make UK made the following recommendations to promote investment and job creation, especially among young people:

Immediate term:

  • Extend the 130% super-deduction investment incentive beyond March 2023
  • Extend the Kickstart program for at least 12 months, not just until March
  • Modify the employment assistance system to support manufacturers
  • Extend the Help to Grow programs, by creating a Help to Grow Green program
  • Deploy the Made Smarter initiative to help SMEs go digital across the UKIn the next six months:
  • Correct the corporate pricing system by simplifying the process, removing facilities and machines from calculations and removing green investments from the assessed value
  • Allow employers to use up to 20% of apprentice tax funds to be allowed to cover apprentice wage costs and double the incentive payment for employers
  • Develop an online digital skills account for employees
  • Offer support, such as VAT relief to help jump-start small players in intensive or high-energy commodity supply chains
  • Describe how to take advantage of the consultation comments on R&D tax credit relief
  • Develop additional field support with market contacts, agents and other advisers with local knowledge to help companies succeed in new markets
  • Offer a package of grants and practical support to help exporters attend trade shows and similar events

In the next twelve months:

  • Allow employers to spend up to 20% of their apprentice contribution funds on capital expenditures and provide additional funding to suppliers of capital goods
  • Explore the introduction of an export tax credit to support successful exports
  • Establish an intersectoral and government resilience working group. This working group would assess supply chain disruptions throughout the crisis and establish an action plan for future lockdowns or pandemics.

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